GILROY
– In the middle of this year’s grape crush and in a legal
entanglement with its lone employee, the Santa Clara Valley Wine
Growers Association has filed for bankruptcy.
GILROY – In the middle of this year’s grape crush and in a legal entanglement with its lone employee, the Santa Clara Valley Wine Growers Association has filed for bankruptcy.
A bottom-of-the-barrel economy had drained the nonprofit winery guild dry, members said Thursday, and it didn’t help that area charities were increasingly offering the kind of wine-tasting or wine-auction fund-raising events for which wine associations are famous.
The wine association got its revenue from these events and from membership fees, and both streams were low. Membership income took a hit within the past month or so when two of the 15 member wineries left, association President Valerie Vanni confirmed.
One of these was Pedrizzetti Winery of Morgan Hill.
The wine association’s board – comprised of winery owners, advertising and tourism businesspeople and one grape grower – made the decision to dissolve the nonprofit on Oct. 1 and on Oct. 3 filed for total, Chapter 7 bankruptcy, effectively ceasing the nonprofit’s existence.
“Basically, the organization became insolvent, and it was on the advice of a very good legal counsel that this was the only option,” Vanni said Thursday.
Since July, the wine association has been embroiled in a legal complaint filed by its executive director, Valerie Brockbank, who alleges harassment, gender discrimination and failure to provide worker’s compensation insurance as required by law. Brockbank’s position was eliminated with the Oct. 3 bankruptcy announcement, although she says association board members still haven’t informed her of this. She declined to say whether this would prompt her to sue the association again.
The wine association’s failure doesn’t mean area wineries are themselves close to bankruptcy, but it does mean that they’ll have one less tool to promote themselves with. The weak economy isn’t doing them any favors, either, Vanni said, pointing to her own Rancho de Solis Winery in Gilroy as an example.
“Our tasting rooms are quieter,” Vanni said. “Fewer people are visiting. I can tell you from a personal standpoint that our tasting-room sales have gone down.”
Clos LaChance Vineyards, of San Martin, is both a member of the wine association and is owed money by it. Owner Brenda Murphy said she doesn’t think the association’s downfall will cause any direct detriment to her business; she described it as “just a sign of the times.”
“Times are tough right now,” Murphy said. “Event attendance is down. … There are so many fund raisers out there.”
The wine association supported itself largely through fancy fund-raising events, but there is less donation money to go around during these lean economic times. At the same time, Murphy said she’s seen a massive increase in the number of charity groups holding fund raisers involving wine tasting and wine auctions. With so many choices offering the same thing for people’s donations, Murphy said she thinks the people who go to such events are more likely to give their money to a charity than to the wine association.
Alex Larson, who owns Rapazzini Winery of Gilroy along with his brother, left the wine association’s board this year, although Rapazzini remained a member. He described his reaction to hearing on Oct. 2 of its shutdown as “one of great disappointment” – but he’s also working out a plan for a new, South Valley wine guild.
“This was the longest continuous wine growers association in California, as far as I’m aware, so to have it go under is quite distressing,” Larson said. “The fortunate thing is, there’s been a lot of talk among South Valley wine growers, the Gilroy and Morgan Hill area, that we’re going to bring back the events we used to do in a different sort of organization.”
Larson said he and other South County wine entrepreneurs had been discussing the idea of a breakaway wine association for a couple of months, and he thinks local vintners need to band together to better promote their products.
“There are still some people in Gilroy who don’t know we have some of the oldest wineries in the country here,” Larson said.
Jenny Midtgaard Derry, executive director of the Santa Clara County Farm Bureau, said she was “very dismayed” when she found out about the wine association’s insolvency last week.
“I thought it was a very good thing when they got together and hired a staff person to help promote the local wine industry in South County,” Derry said. “I hope they’ll try it again sometime.”
The Farm Bureau owns the Morgan Hill office the wine association used and is listed as a creditor in its bankruptcy.
Brockbank says Derry told her Thursday of the wine association’s bankruptcy and that her job no longer existed. Derry said Brockbank didn’t appear to know when she showed up at work Wednesday.
“She came into the office (Wednesday), and it wasn’t there anymore,” Derry said.
Brockbank had been working from her home most of the time, coming into the office periodically – with the permission of wine association officials, she said. “I appreciate (Derry) being honorable and kind to me, as she always has been. … It’s unfortunate that I didn’t hear it from my own employers.”
Vanni declined to comment regarding Brockbank’s layoff.
Brockbank said she has a contract with the wine association until June 2004.
“I regret and am disappointed in the way the association has handled this, but because I have not officially been told I have been terminated, I am still under the impression that I am employed,” Brockbank said. “I am still waiting on that. … Certainly my reputation is strong with the business community in the South Bay, and certainly my integrity and ethics are strong. As an employee in California, I am standing up for my rights.”
The Santa Clara Valley Wine Association had existed since 1947 with the mission of educating the public about the Santa Clara Valley’s wines. The Santa Clara Valley, association members say, is the oldest continuously cultivated wine region in California.
