Complaint Review: Michael Denny - Internet

Michael Denny hid behind bankruptcy and skated off with hundreds of thousands of wineries' money that he collected from various distributors around the country. He claims it was just a failed business and poor business model, but he created a mess and wove a tangled web of lies. He's evading paying his creditors so far. 

The attorneys of New Zealand’s Delegats Wine Estates, formerly Michael Denny's largest client, sued fraudster Michael Denny in federal court. The U.S. District court in San Francisco and a jury panel have awarded Delegats $189,924 in damages and interest on top of $336,131 in Delegats’ receivables which AWD has admitted owing.

According to the jury verdict, AWD and its founder, Michael Denny, breached their fiduciary duty and improperly converted $115,000 of Delegat’s funds to their own uses.

Legal advisors have given me the green light to say that the “anonymous” poster of this bit of slander is Dan Tudor of Tudor Wines.  tudor wines . com / about / winemaker/ 

Here’s the story about why Dan is so upset, he would slander me on a site like this.

In September of 2009 American Wine Distributors signed a distribution agreement with Gulfstream Wine Traders (GWT) appointed by Tudor Wines (TW) as their agent “for the purpose of managing finances, distribution, product handling & storage, and any other requirements and contracts necessary for the sale of the brands”. Over the next several months GWT worked hard to get their sales business going. But despite best efforts they were unable to overcome the difficulties of startup and failed. The business was wound down in a professional matter. All funds due to GWT per the AWD agreement were paid in full; products were sold back to suppliers and returned for credit. But there was plenty of disappointment to go around.   

 TW first contacted AWD in 2010 via a telephone call from Dan Tudor. He was unhappy with the financial results of the GWT project and wanted to know what happened. We went through all the transactions, charges, contracts and terms outlined in the signed paperwork. Then he became angry saying “F* the agreements, I’ll come up there and put a bullet in your head”. A report with the San Francisco Police Department was filed promptly.

Following this incident there was a more professional meeting with attorney K.C. Branch who reported the amount owed was “over $46K”. After a number of meetings it was agreed TW actually owed AWD/GWT a small amount of money which TW paid and the transaction was completed…we thought.

Over a year later, AWD was contacted by Texan collection agency Tucker, Albin and Associates saying there was an amount still owed of $37,076.70. And a year after that, this latest complaint was filed indicating the amount owed is now down to $29,805.65. The agreements that bound TW in this transaction with AWD are never mentioned.

TW knew they would only get paid if revenues from sales exceeded costs of distribution and GWT commissions. This was clearly laid out in advance. GWT never achieved the economies of scale they anticipated and represented to suppliers before they had to quit. And the additional costs of winding down didn’t help. The bottom line is that everyone lost money including AWD.

The agency agreement Tudor Wines signed on behalf of GWT made it clear:

1)      TW was bound to the terms and conditions of the AWD Distribution and Services Agreement signed by their Agent, GWT.

2)      TW agent (GWT) was responsible for issuing payments to TW on behalf of Distributor, not AWD.

4)      TW agent (GWT) was responsible for the economics of all logistical decisions regarding supplier product handling and market pricing to insure a favorable financial outcome for suppliers.   

3)      TW agreed to accept the terms of the agreement and to “hold Distributor (AWD) harmless should their Agent not perform according to contractual terms for any reason”.

AWD performed according to contract terms. AWD doesn’t and never did owe TW money. TW, like AWD, was understandably unhappy with the results of a business decision we both made a long time ago. GWT had an exciting plan we understood and agreed to participate in. Despite best efforts, we all took a licking. There’s no good reason to waste time placing blame for the results. It is time to accept responsibility for choices we all freely and knowingly made…and move on. 

Please see attached copies of all the signed paperwork referenced in this rebuttal. Please feel free to contact me personally if you have any questions.

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Was just informed about this posting from 2014. It doesn’t deserve a reply but here’s one anyways.

It is true Delegats obtained a judgement. That is not news. We admitted the money was owed from the very beginning. We had been paying them $10,000 per month for over a year while negotiating a settlement to a problem that began with the death of my father and the economic crisis of 2008 and 2009. In fact, throughout the entire process, we offered to pay in full including interest. We even offered to pay 50% of what was owed up front and the rest in payments including interest. But rather than work with an agreeable debtor, they chose to sue us in court if we did not pay the entire amount owed immediately. Unfortunately, that was impossible.

It appeared their plan was to use a judgment in civil court to gain control of the company through corporate governance. Our fear was they planned to take over the company and forcibly extract the money by any means necessary without any concern for the consequences to anyone but themselves. That had been a pattern in business for these people. If successful, they would have had the power to take control of the company’s inventories and receivables generated through the activities of our other 200 clients. That could have harmed our clients’ businesses and destroyed American Wine Distributors with it anyways.

Rather than risk subjecting our good clients and friends to that kind of abuse, we chose to close the company on our own terms and help our clients out of harm’s way. Curiously, once Delegats got their judgment and we announced we were closing the business, they instantly offered to settle for 50% of the amount due. It was an offer we would have gladly taken at any time over the previous three years. But it was too late.

There was never a judgement of “ripping off”. There was no bankruptcy. There was no theft conviction. It was not a scam. American Wine Distributors never defrauded anyone and this poster knows it. American Wine Distributors was a company of good standing for over 26 years serving thousands of clients from around the world including some of the most prestigious companies in the business. It was an innovative company that attempted to disrupt the drinks industry middleman establishment to create more value for suppliers and consumers. But its time had come to an end.

We reconciled with our bank, every supplier, every employee, every other creditor and every government agency in the 65 jurisdictions around the country where we were licensed to operate and paid taxes. And I have personally moved on to a better life with all my friends and good relationships intact.  

My new business partners are very successful and have incredibly good reputations all over the world. They might take exception to someone anonymously posting that our wine business real estate and vineyard activity is a “scam”.  But it is hardly worth pursuing as we’d have difficulty proving damages from this. And besides, if there was any truth to what is said here, this person would have been happy to put their name on it.