Copia: The American Center for Wine, Food and the Arts filed for bankruptcy protection Monday but vowed it will reopen and operate while it reorganizes its business affairs.
The Chapter 11 filing came a week after the the Napa wine center suspended its operations, locked its doors and sent all its workers home after running short of cash.
The bankruptcy petition was filed in the U.S. Bankruptcy Court for the Northern California District in Santa Rosa, interim chief executive Garry McGuire said in a statement.
McGuire said Copia has secured a $2 million line of credit that will allow the center to pay employees and suppliers.
"The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position our public-benefit corporation to compete more effectively," McGuire said.
McGuire could not be reached for additional comment. John H. Mac Conaghy, Copia's Santa Rosa bankruptcy attorney, did not return messages left at his office or home.
Though a copy of the filing was not available Monday, the wine center has at least $77 million in debt, most of which is owed to investors who bought tax-exempt bonds that a state-run bank issued for Copia to help finance the construction of the wine center.
McGuire said Copia will seek approval of a plan to sell its real estate and lease back facilities at its sprawling Napa complex, where it offers wine and cooking classes and other cultural programs.
In his statement, McGuire estimated he'll need six months to restructure Copia so it can "achieve profitability and long-term sustainability." He said the center will reopen but did not say when, and no additional information was available on Copia's Web site.
A Bee investigation this summer revealed that since it opened in 2001, Copia has lost between $4 million and $12 million a year and had accumulated a $14 million deficit.
The Bee also found that the state Infrastructure and Economic Development Bank approved a refinancing deal that boosted Copia's debt last year, even though it was already insolvent and facing $225,000 in penalties for breaching federal tax rules.
The bank defended the deal, saying safeguards exist to ensure bond investors get their money back if Copia fails.
Call The Bee's Andrew McIntosh, (916) 321-1215.
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