In the RNDC Wind Down, Who Loses

Just to prove how nerdy we can get, we spent a few hours reading the documents in the Republic National Distributing Co. Chapter 11 bankruptcy. We began because Chapter 11 usually means the debtor is expected to emerge as a going – although smaller – concern. But in this case, a lot of media referred to the matter as a "wind down," which is usually a state law case in which management retains control but the firm is ultimately liquidated.

After reading the documents, it's clear RNDC is expected to ultimately disappear. And that leads to the next question, who are the owners and do they expect to walk away with even a dollar. The answer to the last question is no – according to the bankruptcy plan, the owners haven't any expectation there will be enough for them to receive anything from the Chapter 11 wind down.

So who owns loses? Two-thirds is owned by NDC Partners, which is an affiliate of National Distributing Co., which was founded by Chris Carlos, a Greek immigrant with limited English, no money and no background in the alcohol industry, and Al Davis, a young alcohol salesman from New York who had built a reputation working for distributors across the Southeast. Carlos ran finances and Davis ran sales. NDC is separate from RNDC and will continue to operate in Georgia and New Mexico.

The other third is owned by New BG Distribution Partners, San Antonio, Texas, which is owned by members of the Block family. It had been founded by Edward Block, a former route salesman for a liquor distributor, in 1939 with one delivery truck and a small warehouse.

RNDC's history began in 1898, when Newman Goldring, an immigrant from Eastern Europe, founded N. Goldring Corp. in Pensacola, Fla. NGC became the first licensed beer distributor and expanded over the decades. After Repeal of Prohibition, Goldring reopened the busness with the help of his son.

In 1997, the Block and Goldring families combined their businesses to create Republic Beverage Co. Ten years later, RC and NDC merged nearly all their businesses into RNDC.

In addition to banks and other commerecial interests, RNDC owes about $48 million in unpaid principal and interest to members of the Block Family. Those notes are subordinate and junior in right of payment to all other debts of the company.

While it's tempting to say RNDC's owners undoubtedly have enough money to be just fine, the collapse of RNDC has to be a tremendous blow.

However, there's one family that might be laughing all the way to the bank – the Goldring Family. Although Newman Goldring had been one of the founding pillars of Republic Beverage Co., the Goldrings had to exit the company because Brown-Forman and other suppliers weren't happy to see their brands distributed by a company which also had an interest in one of their competitors – fast-growing Sazerac Co.

RNDC didn't have enough cash to fully buy out William Goldring's equity, so the Goldring family assumed complete independent ownership of RNDC's distribution hubs in Dallas, Houston and San Antonio, RNDC has continued to pay rent directly to the Goldring family to use these critical facilities.

If those leases are involved in the sales of various RNDC entities, the Goldrings are continuing to receive their lease payments every month. They just might be the big winners in the collapse of RNDC.