Debts unsatisfied, bank takes control of Kluge winery

The state wine industry, by many accounts, is blossoming. New money is coming in from Richmond to market the fast-growing industry, sales within the state increased by 13 percent in the past year, and a well-received PBS documentary captures the unique challenges of making wine in Virginia. But things are looking decidedly sour for Albemarle County’s largest winery, Kluge Winery and Vineyard, the business that socialite Patricia Kluge and her husband Bill Moses opened in 1999.

Rumors of financial troubles at Kluge Estate Winery and Vineyard have resurfaced in the past several weeks. Owner Kluge herself has long espoused a worldwide vision for her product, often distancing herself from the Virginia industry, per se, aspiring instead to be “one of the East Coast’s most prestigious wineries,” as the Kluge website puts it. But many people close to Kluge’s business have been saying that her creditors took control of operations and fired staff. At the end of last month, Trevor Gibson, who had been the company’s chief financial officer for five years, left Kluge. Reached at his new business, GTG Advisors, he would only say he was “not at liberty to make any comments.” And late last night, after C-VILLE placed calls to one of Kluge’s lenders, Kluge CEO Bill Moses issued an unusual statement. Blaming a “perfect storm” of economic collapse that has also hit the wine industry, he said Kluge’s pace of growth “was not sufficient to satisfy the company’s banking consortium.”

“We have been, and are continuing intense discussions with various potential partners, and have kept our Bank apprised of these positive developments. From our perspective, it is disappointing that at the very moment when these talks appear to be most productive, they have chosen to take the initial steps towards dismantling the winery as an operating business as well as an auction of the property.”

Moses projects that it will “be some time” before a sale can take place and vows to continue discussions with “the promising partners and the Banks.”

Kluge has long been subject to rumors about financial and managerial instability—rumors that resurfaced in the past couple of years as the company ran through winemakers (at least five red winemakers since 1999) and in 2009 when Kluge and Moses put Albemarle House, their 45-room English style manor, on the market, initially for $100 million. At that time, she was pressed to say that the move had no implications for winery operations, a sentiment she repeated when, earlier this year, she brought most of the contents of the house to auction.

Albemarle County’s largest wine operation has 220 acres under vine. One former employee, speaking off the record, described Kluge’s chaotic environment. “It’s like a reality TV show,” the former employee said. “I always said if they really wanted to make money, that’s what they should do.”

For more on this story and another Charlottesville-area foreclosure, see The Working Pour column in next Tuesday’s edition of C-VILLE.

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