Afte months of inner turmoil, the wine and spirits distributor files for court-supervised liquidation.
Republic National Distributing Company (RNDC), long one of the largest alcohol distributors in the United States, filed for Chapter 11 bankruptcy protection on July 26 in the U.S. Bankruptcy Court for the Southern District of Texas. Court documents show the company has estimated assets between $500 million and $1 billion, liabilities between $1 billion and $10 billion, and more than 100,000 creditors.
The distributor announced the move in a company press release, stating that the bankruptcy filing was made to “explore potential sale transactions in court and implement an orderly wind down of our remaining operations.”
RNDC cited shifting market conditions for its financial difficulties, stating, “This decision was not made lightly. Over time, our industry has evolved, consumer preferences have shifted and the wholesale environment has grown increasingly challenging.”
RNDC Sells Assets
Before filing, RNDC sold portions of its business to rival distributors, including Reyes Beverage Group, Columbia Distributing, Martignetti Companies, and Breakthru Beverage Group. The company noted in its press release that these previous transactions helped preserve thousands of positions prior to the bankruptcy process.
“Over the last several months, we have taken deliberate steps to transition our operations across certain markets,” RNDC said in the statement. “We pursued and closed sales that preserved over 5,000 jobs and allowed our businesses in those markets to continue serving their customers and suppliers. Ultimately, RNDC’s financial position required us to pursue an in-court process.”
The bankruptcy filing does not cover all entities linked to the distributor. National Distributing Company (NDC) is not part of the filing, and RNDC's joint ventures in New York, Illinois, Ohio, Michigan, Indiana, and Kentucky are also excluded. The joint venture in Alaska is the only one included in the court process.
Unsecured Debt and Workforce
Court documents list the 30 largest unsecured claims against RNDC, which total over $300 million. Proximo Spirits holds the largest claim at $93.92 million for trade debt and litigation. Financial services provider Empower Annuity Insurance of America is owed $62.4 million, while alcohol suppliers Edrington and Pernod Ricard are owed $5.64 million and $4.07 million, respectively.
In a first-day court motion, RNDC requested court approval to continue paying its remaining 1,450 workers and maintain employee benefits. In the filing, RNDC stated that its workforce possesses unique experience and customer relationships, warning that “absent payment of the Compensation and Benefits owed to their employees, [RNDC] may experience employee turnover and instability at this critical time.”
RNDC stated in its release that it has secured a financing commitment from lenders to support day-to-day operations while navigating the Chapter 11 process.
