Underground Cellar, a San Francisco-based company, could very well be a wine enthusiast’s dream: for free, customers can buy and store up to 500 bottles in Napa Valley’s “temperature-controlled cloud cellar” and ship them (also free). whenever they wanted. It gets better: The company worked directly with wineries to offer exclusive bottle “upgrades” where, during weekly “offers”, attendees could buy, say, a $25 Cabernet for a chance to get a $500 bottle of the same wine. .
However, as of late, many of Underground Cellar’s customers are not at all grateful.
At the end of April, the wine company abruptly stopped operationsand a few days later filed for Chapter 7 bankruptcy, Chronicle of San Francisco informed. Underground Cellar owes nearly $25 million in wine and other debts, and some former clients are now wondering if CloudCellar even exists.
Gregg Thatcher, former client, also manages facebook group dedicated to discussing the current situation with Underground Cellar. It has about 600 members.
“That’s just terrible. Everyone feels robbed,” Thatcher said. Chronicle of San Francisco. “People have amassed these huge collections and don’t know what they’re going to do. It’s a huge loss for them.” He added that he himself was owed about $1,000 worth of wine, but owed others hundreds of thousands, with one person saying he spent $200,000 on wine he now cannot access.
Three Days Before Underground Cellar Announces Bankruptcy Eric Jensen filed a lawsuit against a company claiming fraud and claiming he has almost $3,000 worth of wine that he can’t get.
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According to the company’s filing for bankruptcy, customers ordered $2.7 million worth of wine that never even made it to the warehouse.
The nature of the Underground Cellar’s fall remains unclear. On his website, he cites “recent market headwinds” and “an inability to secure funding” in an “increasingly difficult capital market” as reasons for his decision to file for bankruptcy.
“I have over $3,000 worth of wine in my cellar. What a scam. How can this be legal? I tried calling and emailing but didn’t hear anything.” written by one user in a Reddit thread discussing the closure of the underground cellar.
Despite reporting earnings of over $20 million last year, Underground Cellar now only has $100,000 in cash and $328,000 in invoices, according to bankruptcy filings. Chronicle of San Francisco. In addition, the company lists physical assets worth less than $35,000.
“It’s ridiculous that this whole company is all they say they have in assets,” Bradley Coppella, who said he spent over $15,000 on wine with the company, told the publication.
Entrepreneur reached out to Underground Cellar for comment.
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