A subsidiary of vodka maker Stoli Group has filed for bankruptcy, reporting that it was triggered by an August 2024 ransomware attack amid ongoing issues with the Russian government.
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Stoli Group USA and Kentucky Owl, subsidiaries of vodka maker Stoli Group in the United States, filed for Chapter 11 bankruptcy protection on November 29, 2024. The bankruptcy of these companies is said to be related to a ransomware attack that occurred in August 2024.
Stoli Group (USA) bankruptcy filing | DocumentCloud
https://www.documentcloud.org/documents/25431317-stoli-group-usa-bankruptcy-filing/
Vodka maker Stoli says August ransomware attack contributed to bankruptcy filing | The Record from Recorded Future News
https://therecord.media/stoli-group-usa-bankruptcy-filing-ransomware
Vodka maker Stoli files for bankruptcy in US after ransomware attack
In documents filed in the Texas bankruptcy court on November 29, 2024, Stoli Group CEO Chris Caldwell reported that 'Stoli Group USA and Kentucky Owl have a total of $84 million in debt.' He further stated, 'We have incurred debt due to a variety of external factors, the most notable of which is the ransomware attack that occurred in August 2024.'
According to Caldwell, the data breach and ransomware attack that occurred in August 2024 disabled Stoli Group's enterprise resource planning system and forced almost all of Stoli Group's internal processes, including accounting functions, to be entered manually. This resulted in significant operational issues for all companies within Stoli Group, including Stoli Group USA and Kentucky Owl.
The ransomware attack also made it difficult for Stoli Group USA and Kentucky Owl to provide their financial data to lenders. As a result, the lenders to these companies deemed them 'in default' and prohibited Kentucky Owl from moving or selling inventory with lender approval. Caldwell said Stoli Group's enterprise resource planning system is expected to be restored by the first quarter of 2025.
In addition, due to factors including a decline in alcohol demand and inflation after the COVID-19 pandemic, Stoli Group USA and Kentucky Owl have filed for Chapter 11 bankruptcy protection. Caldwell said, 'This bankruptcy filing is necessary to maximize the value of Stoli Group USA and Kentucky Owl for the benefit of all creditors.'
Stoli Group has been embroiled in a long-running legal battle with the Russian government. In March 2000, Russian President Vladimir Putin issued a presidential decree making the Stolichnaya vodka brand, which was sold by Stoli Group, government-owned. Stoli Group founder Yuri Shefler was accused of 'politically motivated' crimes and fled Russia to avoid Russian authorities trying to seize Stoli Group's assets.
By Yuri Samoilov
Since then, Stoli Group has been involved in numerous trademark lawsuits both in Russia and abroad, but in July 2024, the Russian government designated Stoli Group and Scheffler 'extremists' for supporting Ukrainian refugees, and confiscated two distilleries owned by Stoli Group in Russia, with a total value of $100 million (approximately 14.9 billion yen).
'As a result of this protracted legal battle with Russian authorities, we have been forced to spend tens of millions of dollars,' Caldwell said. 'Stoli Group 2024 has been tested in every way. We are determined to emerge stronger from this period of adversity.'
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