Wine aficionados across the US were left in a frenzy after the shocking bankruptcy of Underground Cellar, a popular online marketplace. Not only did customers lose access to their prized collections, but hundreds of thousands of bottles worth millions were trapped in a California warehouse. This captivating story chronicles the months-long battle waged by passionate wine lovers to reclaim their bottles and navigate a complex web of bankruptcy proceedings.
Launched in 2014, Underground Cellar seduced customers with a game-like platform offering exciting upgrades, "blowout" deals, and free storage in their Napa Valley climate-controlled haven – CloudCellar. This enticing arrangement attracted legions of collectors who built impressive inventories, trusting the company to safeguard their investments.
Disaster struck in April 2023 with the abrupt closure of Underground Cellar. Customers were locked out of their online accounts, and communication vanished. Panic set in as rumors swirled about the fate of their treasured wines. Social media became a platform for anxious customers to connect and vent their frustrations.
Adding fuel to the fire, a crucial detail emerged – a significant loan secured by Underground Cellar with TriplePoint Capital, a venture capital lender. TriplePoint asserted ownership of the entire inventory, including the customer-owned wines in storage, as collateral for the defaulted loan.
Undeterred, a group of dedicated customers, representing thousands of dollars in stranded wine, refused to back down. They enlisted legal representation and countered TriplePoint's claim. Their argument rested on the fact that Underground Cellar functioned as a marketplace, facilitating transactions between wineries and collectors, not owning the wine itself.
A glimmer of hope emerged in September with a surprise bid from Underground Cellar's former CEO, Jeff Shaw. His proposal offered a buyout and the chance for customers to retrieve their bottles at their own expense. However, this ignited a bidding war, ultimately won by TriplePoint with a higher offer.
TriplePoint's victory meant customers' hopes of recouping their wine at minimal expense were dashed. The new owner implemented a retrieval fee amounting to 21% of the original purchase price, plus hefty shipping and handling costs. This often equaled or even exceeded the initial purchase price, creating outrage and disappointment.
Behind the scenes, lawyers tirelessly negotiated with TriplePoint. Facing the prospect of abandoning the expensive storage, a compromise was finally reached in November. Customers could reclaim their wine by absorbing a 21% fee alongside shipping costs. Unclaimed bottles would become TriplePoint's property.
Relief was short-lived for some. The holiday season arrived, and as customers accessed the website for retrieval, discrepancies surfaced. Missing bottles and damaged shipments added insult to injury. Many felt further frustration with credit issuance for missing items.
Though not without its challenges, the ordeal resulted in many successfully retrieving their beloved wines. However, significant shipping costs ranging from $36 to $93 per case deterred some from reclaiming their collections. The ordeal serves as a cautionary tale for online commerce, highlighting the potential risks and the resilience of passionate consumers dedicated to their cherished collections.
