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Tuesday, 19 August 2014

Farr Vintners buys Magnum Fine Wines




Farr Vintners has today announced that they have bought long established Magnum Fine Wines Ltd, which was founded in 1985. Alan Rayne, who has been a director of the company since 1992 and its managing director for many years, has decided to retire, which is fair enough given that he was born in the great vintage of 1947.

Magnum has been a properly run wine investment company and had there been more Magnums the image of wine investment today would surely not be sharing the floor with carbon credits, coloured diamonds and the like.

Message from Stephen Browett, chairman of Farr Vintners  
'Farr Vintners is delighted to announce that we have purchased Magnum Fine Wines following Alan Rayne’s decision to retire from the wine trade. I have known Alan for nearly 30 years and feel very honoured that he has chosen to entrust Farr Vintners to look after his customers and their wine portfolios in the future. Alan is rightly proud of the business that he has built up and a key part of his decision to pass the company on to Farr Vintners was that he knows that his customers will continue to receive exemplary and professional service.  

Farr Vintners, like Magnum Fine Wines, holds all of its stocks and customer reserves in the outstanding underground cellars of Octavian Vaults. Magnum’s customers can rest assured that they will continue to have their precious wines stored in the world’s best wine storage facility.

Over the last 5 years alone, Farr Vintners, based in Battersea, South London, has sold nearly £600 million worth of fine wine and is now the world’s leading Fine Wine Wholesaler, storing well over a million bottles of wine on behalf of its customers, who are based in many countries all around the world.

Farr Vintners was the first UK wine merchant to open an office in the Far East when Farr Vintners Asia was established in Hong Kong nearly 20 years ago. Our sales teams in both London and Hong Kong will be very pleased to assist Magnum’s customers and offer genuinely informed and expert advice on all aspects of wine buying, selling and storage. The first contact for Magnum customers in the UK is Farr Vintners Director Tom Hudson (tom@farrvintners.com) and in Asia Jo Purcell, Managing Director of Farr Vintners Asia (jopurcell@farrhk.com). However Alan Rayne will be pleased to help and advise customers until he leaves the company at the end of September. 

Over the coming weeks we will be working hard to integrate Magnum Fine Wines’ customer information into our own system and once this is completed we will be able to offer customers access to their portfolios online as well as the wealth of information available to our existing customers. We will contact customers once this process is complete with further details.'

Twelve-By-Seventy-Five Ltd: not for me thanks!



This is yet another recently formed wine investment company: Twelve-By-Seventy-Five Ltd was set up on 24th January 2014. Its two present directors – 27-year-old Sultan Mahmood Rashid and 29-year-old Riccardo Tullio De'nardis were appointed on 8th April 2014.  

 
'We are experienced wine merchants & brokers'
'We have firmly established contacts with French négociants'

For a company formed in January 2014 they have gained experience and contacts with remarkable speed...  
 
'Fine wine is an excellent alternative investments.
'The fine wine is booming picking the right wines 
gives significant opportunities for incredible tax-free returns.' 

Fine wine, especially Bordeaux, is not booming as prices have been dropping since 2011. 

Incorrect claims of fine wine investment is free from capital gains tax.
No mention of inheritance tax  

 'Its official Classification (Appellation d'Controlee) 
dates back to 1855 at Napoleon 3rd's request.'

Twelve-By-Seventy-Five Ltd confuse Appellation Contrôlée (started in 1936) with the 1855 classification. 

'We store our wine in London City Bond's (LCB) 
bonded warehouse: Vinothèque in Barking' 

Rather alarming – LCB's Vinothèque is in Burton-on-Trent around 150 miles north-west of Barking! 

 How much are the storage charges? Our strong relationship 
with London City Bond (LCB) gives us 
highly competitive storage rates with two options: 

'highly competitive rates'!

Sultan Mahmood Rashid and Riccardo Tullio De'nardis claim a 'strong relationship with London City Bond' but Twelve-By-Seventy-Five Ltd has no company account at LCB. The 'highly competitive storage rates' claimed by Twelve-By-Seventy-Five are LCB's standard rates from private customers:

LCB's standard charges for private account holders 


The last thing the fine wine trade needs is another 'wine investment' company making false claims. I'll certainly avoid Sultan Mahmood Rashid and Riccardo Tullio De'nardis new Twelve-By-Seventy-Five Ltd, which I hope will be both short-lived and unsuccessful.   





 




Friday, 15 August 2014

9-year ban for Ofosuherne Ofori-Duah of Vintage International Ltd scam

9-year director's ban for boss of scam investment company: Vintage International Ltd, which collapsed in October 2012 with debts of around £1.2 million. Ofosuherne Ofori-Duah's Vintage International Ltd continued to trade for over a year despite being insolvent. 

The company was set up in August 2008. Vintage used an accommodation address in Canary Wharf as well as high pressure sales tactics including cold calls. Clients were also substantially over-charged for their investments wines, so even those investors who received their wines are likely to have made a substantial loss. High initial prices compounded by a falling fine wine market.    
  
From the Insolvency Service: 
'Mr Ofosuhene Ofori-Duah, the director of Vintage International Limited (“Vintage”), a company incorporated to provide wine investment services to clients, has been disqualified from acting as a director for a period of 9 years for causing Vintage to trade with undue risk to its clients.

The disqualification follows an investigation by the Insolvency Service’s Company Investigations Team in London.

Mr Ofosuhene Ofori-Duah, has given an undertaking to the Secretary of State for Business, Innovation and Skills that he will not act as a director of a limited company for nine years from 30 July 2014.


Vintage went into voluntary liquidation in October 2012 owing its clients £1,063,424 in respect of unfulfilled wine orders. Total assets available at the date of liquidation were estimated to realise £21,789 and the total shortfall including trade and other creditors was estimated to be £1,121,546.


Commenting on the disqualifications, Mark Bruce, a Chief Investigator at The Insolvency Service said:


“The director in Vintage failed to ensure proper corporate governance was in place to clearly monitor client orders and the financial position of the company.

 

“The Insolvency Service will always look to remove from the business community those directors who act below the standards that should be expected of them given the circumstances of their company’s trading.”

The Insolvency Service investigation found that at 30 June 2011 Vintage had unfulfilled client orders of at least £293,056, over half of which had been placed at least six months earlier. At this time, Vintage was insolvent and had insufficient funds available to purchase the necessary stock to meet those outstanding client orders.


Despite its insolvency, Vintage continued to take new client orders and between 1 July 2011 and the date of liquidation it took a further £917,410 from clients for wine purchases. By liquidation only £148,917 of these new client orders had been fulfilled.


Notes to Editors
Vintage International Limited was incorporated on 22 August 2008 and went into voluntary liquidation on 26 October 2012. Its registered office was 29th Floor, One Canada Square, Canary Wharf, London E14 5DY.

Ofosuhene Ofori-Duah, also known as Ofo Duah, 35, of Greenwich, South East London gave an undertaking on 8 July 2014 to the Secretary of State not to be a director for 9 years. The disqualification commences on 30 July 2014. His date of birth is 18 May 1979.

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot;
act as a director of a company;

take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership;

act as an insolvency practitioner; or

be a receiver of a company’s property.
 
In addition many other restrictions are placed on disqualified directors by other regulations.
 
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
 
Further information on director disqualifications and restrictions can be found at: https://www.gov.uk/government/collections/information-about-company-director-disqualification'

Investing in case of 2005 Lafite in 2010 could mean a loss of nearly £5K

Château Lafite, Pauillac

There are claims that wine consistently out-performs other investment assets classes and that £10,000 invested would provide an annual profit of over £2000 over a ten year period.

 'Over 10 years an investment of £10,000 would 
earn you on average over £2,000 every year'

Initial capital of £10,000 
chart giving average 10yr rtn 
showing £16,247.10 after 4 years 

It appears that Cult Wines Ltd base their projections on The Liv-ex Fine Wine Investables Index


'From the Liv-ex site: 'About the Index
The Liv-ex Fine Wine Investables Index is designed to track the wines commonly found in a wine investment portfolio. The index consists of Bordeaux red wines from 24 leading chateaux. The component wines date back to the 1982 vintage and are chosen on the basis of their score from Robert Parker. The wines are priced using the Liv-ex Mid Price with various scarcity weightings applied to account for older vintages and wines produced in smaller quantities.


The index dates back to January 1988 and was rebased at 100 in January 2004. Liv-ex has been calculating Mid Prices for selected wines from 2001 onwards. Component prices prior to that date are the result of an extensive collection of historical price data from leading fine wine merchants.'

I thought it would be interesting to put these claims to a small test. Using wine-searcher I looked at the prices of a case (x12) of 2005 Lafite over the past four years, which could have been bought in June 2010 for £10,000 – the cheapest UK price (We love wines) shown. 


2005 Lafite: profit and loss account
Col 3: merchant on wine searcher offering lowest price 
Col 4: annual increase or decrease on price 
Col 5: net profit or loss on year 
Col 6: loss over 4 years
   

The investor's Lafite that cost £10,000 in June 2010 could be bought on 9th August 2014 for £5750 from Cavex – down by £4250. This loss is compounded by £60 for annual storage and insurance charges (figure taken from Cult Wines Ltd' charges as stated by Premier Cru in their 31.7.14 letter to their clients). Loss climbs to £4310. If the case had been with a wine investment management company and assuming an annual management charge of 1.75% (as charged by Premier Cru Fine Wine Investments Ltd) on the value of the portfolio, then a further £588 must be factored in. This brings the total loss over the four years and two months to £4898 or £1224.5 a year some distance away from an annual profit of 'over £2000 a year'. Even the worst performing Cash ISA would have performed better.

Obviously there are some caveats here. The Lafite's performance is charted over 4 years and not ten. 2011 to 2014 has seen the worst wine bear market for many years. I have looked at just one wine and not a balanced portfolio albeit that Lafite, especially a vintage like 2005, is a popular choice for wine investment.  

••

Cult Wines Ltd: projection £10,000 could 
on average become £23,380.70 in 7 years 

  

2005 Lafite European auction prices: Jan 2007 - July 2014
Col 2: auction prices 2007-2014
Col 3: prices including Buyers Premium and sellers commission
+ net 
Col 4: storage at £15 a case per year
Col 5: management fee of 1.5%
assumes that wine is held through investment 
company that charges a fee

Taking a longer view (7 years) using auction figures on 2005 Lafite (January 2007- July 2014) from wine-searcher makes this for the moment a better investment, although still far from an average profit of over £2000 a year.  

The wine-searcher figures show that the 2005 Lafite bought at auction in January 2007 for £3700 (£4329 with buyers premium of 17%) could have been sold at auction in July 2014 at £8784 (£7905 with seller's commission deducted – calculated at 11%). This gives a gross profit of £3576. Take away the cost of seven years storage (£15 a case as charged by Cult Wines Ltd = £105) – profit is reduced to £3471 (£496 a year). This is still a very decent profit over the seven years but nowhere close to £2000 a year. 

Had the investors entrusted their case of 2005 Lafite with a company charging an annual management fee at 1.75% (like Premier Cru Fine Wine Investments or Cult Wines Ltd) the net profit would be reduced by a further £1327.69 to £2143 (£306 a year). Still far better than a Cash ISA but the investor will be offering prayers that the wine bear market ends soon, otherwise their profit will be further eroded.           


 

       



Thursday, 14 August 2014

Premier Cru/Cult Wines: paying a 5% management will release wines?!



investdrinks was contacted yesterday by a client of Premier Cru Fine Wines Investment Ltd. They had just been told by Cult Wines Ltd that their portfolio, which has a small 'shortfall' could be transferred into their own account if they set one up. However, they would have to agree accept Cult Wines proposal which includes the 5% 'why so high' management fee.  If they don't sign up with Cult then apparently it will be down to the liquidator, if the remnants Premier Cru Fine Wine Investments Ltd goes into liquidation, to decide whether the wines can be released to the remaining clients of Premier Cru.

I find it intriguing that the payment of a 5% management fee to Cult Wines Ltd establishes title, whereas if a client declines to sign up to Cult Wines, then it will be down to a possible liquidator in the future. This doesn't appear to be entirely equitable....  

It is, however, clearly advantageous for clients to be move their portfolios into their own accounts so that they have full control over their wines and are not dependent upon a company whether it be Premier Cru, Cult Wines Ltd or any other wine company. 
  
A number of Premier Crus clients have said that they feel trapped between a rock and a hard place – I can well understand what they mean. I am extremely relieved that I declined on several requests from Premier Cru Fine Wine Investments Ltd to list them as a company from whom I would consider buying wine.

Update: seeking legal assistance?
Yesterday, on a recommendation through twitter, I referred a client of Premier Cru to Michael Clark (mclark@nash.co.uk) of Nash & Co solicitors in Plymouth. Tel:01752-664444.

Although I don't know what the fees are, Michael is prepared to have a free preliminary chat with investors seeking advice. 
01752 66 44 44
 

 

 





Tuesday, 12 August 2014

Encarta Fine Wines Ltd into liquidation: frozen bank facilities blamed


Canary Wharf – getting a reputation for scams  

Yet another wine investment company, Encarta Fine Wines Ltd, has just gone into voluntary liquidation with sums due to creditors estimated at between £3.5 to £3.8 million. The creditors’ meeting was held today at the Marriott Hotel in Bexleyheath, London.

Encarta has around £1.7 million worth of stock held at London City Bond, which is estimated to realise about £1.3 million. The pay out to unsecured creditors is estimated to be in the region of 25p-30p in the pound.

Encarta was set up in July 2009 with 35-year-old Dean Doughty and 39-year-old Matthew Hart as directors.

The liquidator, Nedim Ailyan of Abbott Fielding, says that the directors have blamed the collapse on their bank, HSBC, freezing their banking facilities for four months.

Ailyan said: “Because of concerns about the level of commodity fraud I believe that the Financial Conduct Authority has been asking banks to investigate commodity asset investment companies that might have suspicious transactions. Although I have already seen this happen with companies selling other commodities, this is the first time this is said to have happened to a wine investment company.”

It is thought that Encarta’s banking facilities were frozen earlier this year and were then unfrozen once the four-month investigation was completed. It is not known whether Encarta continued to trade while their banking facilities were frozen .

(More to follow)

 




Abbott Fielding are currently handling the liquidation of several wine investment companies including Canary Wharf Vintners Ltd, which went into liquidation on 23rd July.

Formed in May 2006 the company changed its name from Strategic Land Acquisitions Ltd in September 2010 to Canary Wharf Vintners. The sole director is 55-year-old Enver Deen.

The deficit is thought to be less than £500,000 with only some 20 creditors. The major creditor is an elderly woman, who is owed some £200,000. She is believed to have been caught by a number of other wine investment firms and subjected to repeated hard-sales tactics.

Deen is currently offering wine investments as well as art, diamonds, land and metals through Belgravia Alternative Assets Ltd. He is the sole director.   



 

Saturday, 9 August 2014

Premier Cru: the questions Cult Wines Ltd declined to answer



This post covers questions sent to Cult Wines Ltd yesterday as well as a look at who has legal control over the wine portfolios held by Premier Cru Fine Wine Investments Ltd.


Questions to Cult Wines Ltd: 
Yesterday I sent request to Philip and Tom Gearing, the directors of Cult Wines Ltd, to answer some questions. As is their right, they declined to answer the questions at this time. Chris Mercer at Decanter magazine was later told that Cult Wines are bound by a confidentiality clause until 15th August. Unfortunately clients of Premier Cru have until 14th August to accept the proposal from Cult Wines Ltd ...

Questions I put to Philip and Tom Gearing of Cult Wines Ltd:
   
a) Cult Wines Ltd will be charging Premier Cru clients a 5% management fee for the first two years? Are there additional advantages to being with Cult Wines that have not been covered in the emails received by clients of Premier Cru?
b) Has Cult Wines Ltd paid Premier Cru for the right to handle clients portfolios? If so what was the sum involved and when was this agreement concluded?  If no money was involved when was the agreement made?
c) What is the name of the company that is handling the arrangements to put Premier Cru Fine Wine Investments Ltd into liquidation?
d) Do you have any indication how the liquidator will view the wine in Premier Cru clients' accounts?
e) In your email to investors (7.8.2014) you mention a shortfall in some of Premier Cru clients portfolios.
What is the value of this shortfall?
Is this shortfall down to en primeurs that have yet to be delivered or is there a shortfall in bottled wine that should be clients' portfolios? If this is the case do you know why wines are missing and how much is missing? To what value?
f) If there is bottled wine missing is it ethical for Cult Wines Ltd to be offering 2013 Bordeaux en primeur as a replacement?


•••


Further reflections and questions including who has legal control over the wines: 
One further question I could have asked is: what have you been told by Premier Cru about the 'shortfall' in clients' portfolios? What reasons for the shortfall have you been given? 

.. and another on the 5% management fee. What additional expenses to Cult Wines Ltd are involved in the transfer that justify imposing a management fee of 5% for the first two years that you admit is 'so high'? 

-          Why are the fees so high moving to Cult Wines?
Service Fees – In order to explain the rates being quoted for years 1 & 2, our 5% annual charge for years 1 & 2 are linked to a reducing liquidation fee so should you decide to exit on either year 1 or 2 the total cost will not exceed 10% which matches the current cost for liquidating your portfolio at the prevailing market rates
'a reducing liquidation fee' 

One well-placed observer has commented that the handover 'appears to be a shambles'.

It is not clear that Premier Cru Fine Wine Investment Ltd is actually going into liquidation or will just be wound up. The only mention of a liquidator in any correspondence I have seen is in the email sent from Cult Wines Ltd to Premier Cru clients sent on 8th August.  The letter from Premier Cru (31st July 2014) makes no mention of a liquidator. 
 

It is crucial to know who has currently legal control over the wines clients portfolios held in Premier Cru's umbrella account at EHD as whoever has control can release the wines to Premier Cru clients assuming that title was clear.  

From the Premier Cru letter (31st July 2014) appears that Premier Cru Fine Wine Investments Ltd still has legal control over their clients' wines stored at EHD as the agreement with Cult Wines Ltd is not due to be finalised until 14th August.


'We have therefore undertaken a review of our market competitors and have concluded that Cult Wines, who are currently the UKs leading fine wine investment company as the best positioned to assume management of your portfolio and on this basis we are finalising an agreement to migrate our private clients to Cult Wines (PCI) Limited which we hope to complete by August 14th 2014.' 

It is interesting that there is no mention of a liquidator here. Premier Cru Fine Wine Investments Ltd has legal control over the wines until 14th August 2014. After that date legal control will be with Cult Wines Ltd assuming that the agreement is finalised as envisaged.

Assuming that title to their wines can be established, then Premier Cru ought to be able to release wines up to 14th August to
their clients who do not want to accept Cult's proposal and want to make their own arrangements. From 14th August it would appear to be Cult Wines Ltd, who will be able to release wines.  

From Premier Cru to their clients (31st July 2014):
'To help us complete the transition to Cult Wines as quickly and as smoothly as possible, please confirm your agreement to the transfer of your account to Cult Wines by no later than August 14th 2014.  All you need to do is reply to this notice indicating that you would be content to transfer your account to Cult Wines.  If we do not receive any reply to this notice by August 14th 2014, we will assume that you do not object to this transfer.'


The inferred advice from Premier Cru to their clients
not wishing to accept Cult Wines Ltd's proposal is to contact them (Premier Cru) 'no later than August 14th 2014 declining Cult Wines Ltd's proposal and asking for their wines to be transferred to whatever arrangements individual clients are making. This notification may have to be done through Premier Cru's registered office.      
      
The address of Premier Cru (Fine Wine Investments) Ltd registered office is:
Barnes Roffe LLP 
3 Brook Business Centre 
Cowley Mill Road 
Uxbridge 
Middlesex UB8 2FX 

Links to other posts on Pass the portfolio. Here and here.





Friday, 8 August 2014

Pass the Portfolio: explanation from Cult Wines Ltd to Premier Cru investors


Below is an email message sent on Thursday 7th August by Cult Wines Ltd to a client of Premier Cru Fine Wine Investments Ltd. 

It is clear from a number of messages that I have received that some clients of Premier Cru are not happy with the situation they now find themselves in. One area of unhappiness is the increase in the annual management fee from 1.75% with Premier Cru to 5% for the first two years with Cult Wines. It may be that the answers and explanations Cult Wines Ltd offer below provide the reassurance they want.

There are, however, some crucial pieces of information missing that would assist Premier Cru investors in deciding what is their best option. 

These include
the name of the company making the arrangements for Premier Cru to go into liquidation. It would appear that the creditors' meeting is on 14th August when a liquidator will be appointed. 

Will the liquidator be prepared to release wines in Premier Cru client accounts to individual investors if their ownership can be clearly established. It would appear reasonable to assume that they will as the individuals' stock rotation numbers were included in the letter sent out by Premier Cru Fine Wine Investments Ltd on 31st July 2014. Furthermore Cult Wines Ltd' proposal to manage the stock held in bond by clients of Premier Cru also assumes that ownership and title of these stocks is clearly established.  
 
If the liquidator is prepared to release these wines to investors, then Premier Cru clients will have various options: opening their own account at a bonded warehouse – EHD would be the most logical in this instance as the wines are currently stored there and their fine wine facilities are good. Alternatively, as an alternative to the Cult Wines Ltd, they could consider dealing with storage/management companies like Arc Reserves, Nexus or Private Reserves – see my previous post here. Clients wanting to sell would be in a position to approach a number of merchants to see who is offering the best deal. Though be warned the prices have been falling since 2011, so now is not an ideal time to sell.

Wine funds 
There is a further option that Premier Cru clients may want to investigate  – exchanging the value of their wines into shares in a wine fund. This possibility has been suggested to me by Miles Davis, a director of Wine Asset Managers (WAM). These funds are similar to a unit trust and as they are collective investment schemes their management is regulated by the Financial Conduct Authority (FCA).  The FCA insists that certain criteria have to be met before someone is allowed to invest in one of these funds.

This means that there would be a minimum sum required – Davis has indicated for WAM this would be £10,000. Among other criteria a Premier Cru client would have to show that they are a 'sophistcated' investor and that they understood the nature of collective investment schemes. Naturally WAM or other funds would only be interested if they wanted your wines.

Clearly any investor considering transferring into a wine fund would want to do their own due diligence to establish whether this is a viable and attractive option for them.     

What is the total shortfall of stock? Does this solely relate to en primeur orders that have yet to be bottled and delivered to the UK? Or is there a shortfall of bottled stock that should have been in Premier Cru client accounts? If the shortfall includes wines from more highly regarded vintages, such 2009 and 2010 Bordeaux, how is offering the inferior 2013 as a replacement an attractive proposition. 

From the Cult Wines email (below):  
'-  Is it possible to receive alternative wines to that of the Bordeaux 2013 that is being offered to make up my shortfall?
No, only wines from the Bordeaux 2013 vintage are available to be supplied in order to make-up for the shortfall in your account.'

This suggests that there is a shortfall in bottled wines that should be in clients' accounts at EHD. Why are these wines missing?

Update (14.45 8.8.2014) 
One Premier Cru client reports that in late May/early June 2014 £3000 worth of stock was moved out of his in-bond wine portfolio and sent to Asia without his knowledge and permission. It is not known whether this is an isolated incident or whether there is a large black hole in the wines that should in portfolios held by Premier Cru.    
       
'From: "Premier Cru" <premiercru@cultwinesltd.com>
Date: 7 August 2014
To:  
Subject: Premier Cru - Important Information

Following the recent communication that you received from Premier Cru advising you of their decision to close the business due to ill health, we felt it appropriate to contact you and provide greater clarification of the terms being offered by Cult Wines should you choose to move your account under our management.

This particular option is of course very relevant to those clients who may have been advised of the stock or cash shortfall which exists on their account, we have also noted several questions relating to the fee structure and therefore thought it timely to summarise those key points which will help to clarify the term on offer.

FAQ
-          Are Premier Cru able to sell my wine holdings for me?

-          Premier Cru are currently closed, have ceased trading and are not in a position to fulfil their commitments
-          Premier Cru cannot therefore facilitate any sale of stock on your behalf
-          Premier Cru are unable to meet any shortfall in cash or stock that apply to your account as advised in the email or letter
-          Premier Cru cannot fulfil any payments due for ‘cash on account’
-          Premier Cru are not in a position to offer any services relating to your current holdings

-          If I don’t want to move over to Cult Wines and want to liquidate my investment, how can I do this?

If you don’t want to accept the terms offered by Cult Wines, then you will remain a client of Premier Cru which following 14th August will move into liquidation. Depending on the number of clients that remain and amounts owing to creditors the company will go into either a solvent or insolvent liquidation.
  
As a remaining client you will have to liaise with the liquidators in order to access the stock stored in your reserve account under your name. Once you have received the stock belonging to you from the liquidators, you will then require a wine company to sell your wine for you. Typically the charge for selling wine is 10%.

-          Are Cult Wines able to facilitate the sale of my stock if I want to exit the market?
If you agree to the transfer of your stock to Cult Wines, then we will be able to help facilitate the sale of your wine stock. We will charge a reduced fee of 5% to liquidate your wines through us, this having paid the initial 5% 1st years’ management to transfer your account to Cult Wines.

-          How much are my current holdings worth? Can I have a valuation?
Upon transfer of your account to Cult Wines we will create an online account for you, whereby you will able to log-in and access live market valuations of your stock provided independently by Liv-ex.

Unfortunately due to time constraints and the large volume of enquiries we can only confirm the stock currently held in your name.

-          Are the Cult Wines fees based on initial purchase price or current market price?
The initial 5% first year’s management fee will be based on the total valuation of your holdings once Cult Wines have filled any shortfall you may have with stock. This will be calculated using the mid-market price as provided by independent valuers liv-ex.

-          If there is a discrepancy on my account, how can I best solve this?

With regards to any discrepancy that you may note with reference to the holdings as detailed in the communication, please note that we will be undertaking a full reconciliation & valuation on all accounts for those clients that transfer to Cult Wines Ltd

-          I don’t have cash shortfall, if I decide not to move over to Cult Wines what are my options?

As explained earlier, you will remain a client of Premier Cru, which will move into either a solvent or insolvent liquidation depending on the uptake of clients to Cult Wines’ offer.

It will be your responsibility to then liaise with the liquidators to gain access to your holdings and arrange for any en primeur orders to be delivered.

-          If I do have a cash shortfall and I don’t want to move over to Cult Wines what are my options?
You have a cash shortfall on your account, Premier Cru will be unable to pay this back in cash or assets, therefore you will need to apply as a creditor to the liquidator to try and attain some of what is owed to you.

The stock held in your EHD account, will still remain in your ownership and you will have to again liaise with the liquidators for the release of this stock to you,

-          Is it possible to transfer my wines to another wine company?
If you decide to reject the offer from Cult Wines and move your stock to another wine company, as stated above it will leave you as a client of Premier Cru and you will need to make arrangements with the liquidator for the release of your stock.

-          Is it possible for EHD to release my wines to me, so I can store in my own account? 
As the client accounts are sub-accounts of the main Premier Cru umbrella account, it won’t be possible for you to have EHD release your wines without permission from Premier Cru. As PCI is moving into a liquidation it will then be the responsibility of the liquidator to make these arrangement for you.

-          If I have En Primeur in my portfolio, how will I take delivery of this?
If you have outstanding primeurs which require delivering to your account upon physical bottling in the Spring of next year, if you become a client of Cult Wines we will arrange the collection of your stock from the supplier in Bordeaux and have it transferred to your account.

If you don’t become a client of Cult Wines, you will have to make arrangements with the liquidator to take delivery of your stock when it becomes physical in 2015.

-          Why are the fees so high moving to Cult Wines?
Service Fees – In order to explain the rates being quoted for years 1 & 2, our 5% annual charge for years 1 & 2 are linked to a reducing liquidation fee so should you decide to exit on either year 1 or 2 the total cost will not exceed 10% which matches the current cost for liquidating your portfolio at the prevailing market rates

By Year 3, the fees will revert to the original service charges offered by PCI of 1.75% p.a & 0% fee to liquidate.

-          When are fees payable to Cult Wines?
Upon transfer of your account to Cult Wines, we will issue you an invoice for fees which will be payable by the end of September 2014.

-          What service are Cult Wines offering?
Our proposal is linked to a range of market leading services which are included in the annual charge, but our main focus is on providing each client with a full assessment of their current holdings, a strategy for moving forward with a dedicated portfolio manager to ensure you receive a full private client service.  You will also receive access to oru online portfolio management tool which will allow you to see real-time valuations of your wine portfolio as provided by an independent valuer (Liv-ex) as well as access to your stock holding information.

If you decide to move your account to Cult Wines and wish to re-balance your portfolio through recommended sales and re-investment, Cult Wines will levy no charge for doing so.

-          Can I offset my shortfall against fees owing?
Unfortunately, all client shortfalls will be made up with stock to the market value of that shortfall and this cannot be offset against fees.

-          What are the costs if I don’t move to Cult Wines?

If you don’t decide to accept the offer of moving to Cult Wines, you will remain a client of Premier Cru which as a company will move into a liquidation following the transfer of the remaining client accounts to Cult Wines.
It will then be the responsibility of each individual client to liaise with the liquidators in order to receive the wines being held in your storage account at EHD.

-          The deadline is August 14th, can I have longer to consider my options before making a decision?
Due to the deadline needing to be met for Premier Cru to move into a solvent liquidation, clients are required to make a decision before August 14th as to how they wish their account to be handled.
It is therefore imperative that you provide a response no later than August 14th to ensure you retain the opportunity of accepting our terms & conditions as currently offered to Premier Cru clients
-          Is it possible to receive alternative wines to that of the Bordeaux 2013 that is being offered to make up my shortfall?
No, only wines from the Bordeaux 2013 vintage are available to be supplied in order to make-up for the shortfall in your account.

-          Who is the best person to speak to about my account and answer any questions I have about the proposed transfer?
Please direct your phone calls to 0208 332 9386 where our team are waiting to assist you, emails should be directed to premiercru@cultwinesltd.com
Please be aware we endeavour to answer every client as quickly as possible, but with the volume of enquiries received it may take us a bit of time to get back to you, please bear with us.


We trust clients will view our proposal in a positive manner and look forward to discussing your portfolio with you personally.
Best Regards,'

Other posts on Pass the portfolio here and here.