Stoli Vodka Files for Bankruptcy
Stoli Group USA, the American arm of the renowned vodka producer, has filed for Chapter 11 bankruptcy protection. This decision stems from a severe cyberattack in August 2024, ongoing legal disputes with Russia, and financial challenges.
Cyberattack Impact
In August, a ransomware attack disrupted Stoli's primary operational systems, forcing the company to manage critical functions manually. Restoration of these systems is anticipated no earlier than the first quarter of 2025.
Legal Disputes with Russia
Stoli has been embroiled in a prolonged legal battle with the Russian government over brand ownership. In July 2024, Russia seized the company's last two distilleries in the country and labeled Stoli Group and its owner, Yuri Shefler, as "extremists" due to their opposition to Russia's invasion of Ukraine.
Financial Challenges
The cyberattack and legal issues have strained Stoli's financial position, leading to disputes with its primary lender, Fifth Third Bank, over reporting requirements. Additionally, a decline in alcohol consumption in the U.S. has impacted sales.
Bankruptcy Filing Details
Stoli Group USA and its affiliate, Kentucky Owl, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Texas on November 27, 2024. The filing lists assets between $100 million and $500 million and liabilities between $50 million and $100 million.
Future Outlook
Despite these challenges, Stoli Group USA plans to restructure its operations, aiming to preserve jobs and continue providing its products to consumers. Global CEO Chris Caldwell expects the restructuring to be completed in the first half of 2025.
