Two well-known US alcohol brands, Stoli Group USA LLC and Kentucky Owl LLC, are moving closer to liquidation as their Chapter 11 bankruptcy reorganizations fail to gain traction.
Creditors no longer believe the companies can successfully reorganize and are requesting the court convert the cases to Chapter 7, which would allow the sale of assets to pay off debts.
Stoli Group is recognized in the US for its Stolichnaya vodka brand, while Kentucky Owl produces premium bourbon that has won industry awards, Newsbreak reported.
Despite their strong brand recognition, both companies have faced financial difficulties in recent years, with rising costs and slowing demand affecting Kentucky Owl in particular.
According to court documents obtained by FOX Business, the Stoli Group's US entities filed for Chapter 11 protection in November 2024 in the US Bankruptcy Court for the Northern District of Texas.
The company blamed a cyberattack that disabled its SAP system, causing financial reporting failures and undermining the confidence of Fifth Third Bank, which contributed to liquidity problems.
Alcohol brands could be forced to sell inventory as industry giant declares bankruptcy https://t.co/AjmwQKo79V pic.twitter.com/DNTbjkbqGg
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Stoli Group's Financial Woes Persist
However, creditors argue that the cyberattack does not fully explain the ongoing financial issues.
"The company's problems continued long after the system was restored," the court filings noted, suggesting deeper operational challenges were at play.
According to the NYPost, Chapter 11 bankruptcy is intended to allow companies to restructure while continuing operations, but creditors believe that route is no longer viable for Stoli Group and Kentucky Owl.
A move to Chapter 7 would involve selling off the companies' assets, including inventory, to repay creditors.
Kentucky Owl, while celebrated for its premium bourbon, has struggled to maintain sales amid increasing production costs and a slowdown in consumer demand.
Stoli Group, meanwhile, faced additional hurdles from the cyberattack, but even after resolving the technical issues, the company's financial health did not recover.
Sources reached out to Stoli Group for comment, but the company had not responded at the time of publication.
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