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Californian winery sues landlord over eviction

Californian winery Truett-Hurst – the company that launched the first paper wine bottle – is suing its landlord as it faces eviction from its Sonama vineyard.

Truett-Hurst launched the Paper Boy wine brand in the USA in November 2013

Truett-Hurst’ parent company H.D.D. LLC has launched action against Hambrecht Wine Group LP, the landlord of its Russian River vineyard where its winery is sited, according to The North Bay Business Journal.

The dispute centres on the renewal of Truett-Hurst’s original five-year lease, which it claims it had the right to extend, and did so, in July this year. However according to documents filed by Truett-Hurst with the United States Securities and Exchange Commission, Hambrecht has reportedly rejected this extension saying it was not correctly exercised, writing to HDD to terminate the lease, citing historic defaults on the rent and late charges among other reasons.

Truest-Hurst said it would take “all appropriate actions” to preserve its right to occupancy under the lease for its full term, including the five year extension to February 2021, saying that the loss could have a “material adverse effect on the company’s business, results of operations and financial condition”.

Its legal team further stated the litigation was an attempt to force arbitration over Hambrecht’s plans to evict the winery from November.

Earlier this month Truett-Hurst, which was established in 2007, reported net sales up 5% year-on-year in the first quarter of FY2016, with a consolidated gross margin of 34% and gross profit of $2.3 million.

In November 2013, the company made headlines with it launched its Paper Boy wine brand into US retail as part of a collaboration with GreenBottle Ltd, the UK manufacturer behind the packaging innovation. However following GreenBottle going into administration in April 2014, the brand ran into difficulties, and in the second quarter of FY15 Truett-Hurst was impacted by the an inventory write-down of out-of-date Paper Boy stock.

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