Bad Times: Napa's Copia Refused Chapter 11
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Friday, December 12, 2009, U.S. Bankruptcy Court Judge, Alan Jaroslovsky, rejected attempts by Napa's Copia: The American Center For Wine, Food and the Arts, to secure a $2 million emergency loan to pay expenses and reopen while it tries to reorganize $80 million in debts. Napa's Charter Oak Bank agreed to lend Copia $2 million, but requested for its debt to be secured ahead of bond investors who lent $78 million to the establishment to build its 12-acre complex, which opened in 2001.
Copia, beginning of December 2008
Copia tax-exempt bonds were insured in case the non-profit ever went bankrupt, and the bond insurer, ACA Financial Guaranty Corp. of New York, now faces a substantial loss, since the market value of the property and other assets will not cover the $78 million owed to bond investors. In addition, Copia has another $2 million in debt, thus ACA rejected Copia's attempt to place the bank loan ahead of its own existing debts, and the federal judge backed ACA. Lawyers for bond insurer indicated they want to begin foreclosure proceedings immediately.
In mid-November, Copia officials announced their plan to sell the of the non-profit organization center's 12-acre, riverfront property in Napa's Oxbow District, hoping to lease back part of the site as well as open a new facility in San Francisco. Copia suspended operations on December 1, 2008, when it filed for Chapter 11 bankruptcy protection from creditors, but it hoped to re-open.
Copia chief executive, Garry McGuire, said that instead it will stay closed and its programs will likely be canceled, as, "There are no funds to pay employees, lawyers or PR firms."
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