Kluge foreclosure: Lots of interest, zero bids
It was quite a different scene from the Sotheby's auction in June that drew throngs of people and sales of $15.2 million when Patricia Kluge decided to unload her household furnishings. The December 8 auction was less glitzy and had fewer bidders, who apparently hoped to pick up the foreclosed Kluge Estate Winery and Vineyards for a song.
The opening minimum was $19 million. And as much as the auctioneer cajoled bids–- in $100K increments only–- no one raised their paddles. The bank, Farm Credit, took possession.
More than 50 people milled about the auction pavilion before the sale, most of them curious onlookers rather than serious bidders; people had been warned to bring $250,000 in cash or cashier's check for a deposit.
Trustee Bill Shmidheiser compared the crowd to a soccer team in which there are really only three or so players who matter, and the rest just show up. "Most of these are just showing up," he said.
The auction was scheduled for noon December 8, but was delayed about 15 minutes until one of the five registered bidders arrived. Not present in the crowd: debtors Kluge and her husband, Bill Moses.
The pair ran into trouble when Farm Credit called their $35 million line of credit because sales of the award-winning Kluge Estate wines had not met targets. When the foreclosure became public October 30, the couple vowed to fight to hold onto the winery.
On the block were 907 acres, including 164 acres of vineyards, the Farm Shop, office building, production buildings, six employee houses, the former carriage museum, and the auction pavilion where the sale was held. Another sale December 11 in Madison will auction off 15,000 cases of Kluge Estate wine to ABC-licensed sellers only.
Not included in the auction were the leased bottling equipment and tanks, although those could be had for $595,000, Shmidheimer told the attendees. Nor was the "Seated Torso" green-glass sculpture by Suzanne Pascal, nor Albemarle House, which Kluge put on the market last year for a record $100 million price, but has since dropped twice. It's now listed for $24 million.
Among those in attendance were developers Keith Woodard, who demurred when asked if he planned to bid, and would-be bidder Wendell Wood, who said afterward that the opening price was too high, and he didn't think selling the property in one lot was a good idea. "I'm interested in a couple of parcels," he said.
Meanwhile, the vineyard and winery are still a going concern, said Shmidheiser, an attorney with Lenhart Obenshain, and the Farm Shop will stay open until December 19, with wines available at 50 percent off.
"I've never seen a bank go to this extent to keep it going so the new owner can step into a working concern," he said. "We're not bottling any wine because the new owner may not want the Kluge label. I don't know why Bill Moses said it's being dismantled, because it's a working winery."
Moses did not respond to requests for comment by press time.
And next? "Farm Credit will have the sale after the sale," said Shmidheiser. "Sometimes the registered bidders want to see if they can get a better deal from the bank."
Updated 11am December 9.