Dont take any comments out on me over this, just something I thought you all might like to see:
TO: All Shareholders of Araldica Wineries, Ltd.
FROM: Frank J. Landi, Sr., President
DATE: Friday, 6 November 1998
SUBJECT: Chapter 11 Reorganization
I regret to advise you that your company has voluntarily filed, at 9:34 AM EST on Wednesday, 4 November 1998, to receive the protection of the United States Bankruptcy Court for the Southern District of New York (docket # 98B22885); the reasons were as follows:
1. In re "Grespinet Investments, Inc." ("GII"), of Brentwood, CA:
a. The company was tendered $200,000 in worthless checks in March of 1998 by the principal of this investment banking firm, in payment for an executed stock option.
b. The company executed a $500,000 collateralized loan agreement with GII in June of 1998, to provide the funds required to complete the current phase of the AZIENDA AGRICOLA ANTOGIANNI, S.r.l. winery acquisition. GII reneged on 96% of its contracted financing commitment, providing only $20,000.
c. The company tendered 5,000,000 AWLT shares to GII as collateral for the loan. GII sold all or part of the loan collateral shares, in violation of (i) the legal opinion issued at such time, (ii) the contract's terms and conditions, and (iii) the confirming legend on all certificates, all of which specified that the AWLT shares were tendered to GII as loan collateral only and were under no circumstances to be sold.
d. These actions by GII (i) destroyed the company's credibility, and the OTC price of all AWLT shares, and also (ii) jepordized the company's remaining acquisition financing options, and thereby, all of the company's acquisitions themselves, whether executed or pending.
2. The failure of the principal of DANIELLE CHEESE DISTRIBUTORS, INC. to provide current financial information on his company, which refusals (i) preclude the completion of the acquisition financing arranged by the company, and thereby, (ii) negate the principal's recent commitment to proceed to a closing on the sale of his company to Araldica. The company is continuing its breach of contract litigation against Danielle.
The company has now expended all of its available financial resources for an entire year, awaiting the completion of these two critical acquisitions, either of which would have stabilized the company. The default of the committed Antogianni financing, and the non-preformance of the principal of Danielle, have prevented the completion of both these events to date, which has in turn created sufficient credibility problems for the company (the lack of progress, the destruction of the company's stock price, and the unavailability of new funds) to force Araldica to seek the protection of the Bankruptcy Court, at least until such time as the problems are resolved. |
