Geno Brunton, CEO of Brunton Vineyards, was awarded the title Knucklehead of the year by the Z. However, he is not a knucklehead. This guy is a whole lot smarter than the Z is willing to give him credit for. His work history has "colorful" characters with questionable practices, and Geno seems to have started a web of companies in a wide range of operations.. making it difficult to unweave it all. Some of these companies, it appears, work to legitimize other Brunton corporations. For example, when Brunton Vineyards, Inc. was acquired by New Paradigm Strategic communications, Inc. to form Brunton Vineyards Holdings, Inc., the news was announced in a press release in 2007 by BCC news (a company he started). I'm convinced that a lot of the press that we see on Brunton Vineyards come through this same channel, but, honestly, I have not checked. Another example, when Brunton Vineyards, needed financial assistance and planning, The Seven Investment Group (another Brunton company) is said to have been hired for the job. There are many other examples of this, that I will not mention here.
What does Brunton Vineyards Holdings, Inc. (BVYH) actually look like as a company? Based on all that has been publicized online, not much, although you might not think so at first glance. The announcement of the merger to form BVYH (according to one press release) came on February 6, 2007. The company describes itself as a company that ".produces, sells and markets wine and wine related drinks.... The Company is engaged in the growing and harvesting of wine grapes, the production of wine and distribution and sale of wine products through BV."
On February 9, 2007 BVYH announced the signing of a letter of intent to acquire Vino Venue. On Feb 14, 2007 Brunton Vineyards announced that the three year old San Francisco Wine Lounge owned by Know Wining, LLC was acquired. The deal: "Under the terms of the acquisition agreement, Brunton Vineyards has paid the Sellers an acquisition consideration in cash, with no shares in the publicly traded parent company, Brunton Vineyards Holdings, Inc. (BVYH)."
The stated plan for Vino Venue was as follows: ' Brunton told Wine Business Monthly about his excitement over the VinoVenue purchase. "We see VinoVenue as the next Starbucks for the wine industry," said Brunton. "For us, it makes a lot of sense to have a place where you can go and enjoy the experience of tasting wine."
Brunton's expansion plans will start with outlets in key U.S. cities, such as Los Angeles, New York, Washington, D.C., and select cities in Florida and Texas. Globally, Brunton hopes to add 5,000 locations worldwide within the next five years, eventually expanding to 9,000 locations. One key target is the Chinese market, where Brunton said 300 outlets are being planned. The first is expected to open in Beijing in time for the 2008 Beijing Summer Olympics.'
Opened in October 2004, Vino Venue operated successfully for three years, reporting 1st quarter revenues for 2007 in the amount of $250,000. The original owners had plans to expand to a national chain but instead sold the business to Brunton Vineyards believing he could take it to a whole new level. Then, on November 28th, eight months after acquisition, Vino Venue suddenly closed when the landlord served Brunton with a sheriff's eviction notice for (what looks like) non-payment of rent. According to a posting on the Rip Off Report, Brunton also did not pay a supplier for ordered wine.
(http://www.ripoffreport.com/reports/0/330/RipOff0330672.htm)
But hold on a minute, did you catch that? A vineyard ordering wine? Vineyards produce wine. What about it's own description as a company engaged in ".the production of wine.."?
In any case, a company that has such grand plans for nationwide and global expansion surely would not let a little rent deal get in the way, would it? What about the first outlet planned for the Olympics, which was then, just seven months away? If the original owners were to be paid anything further, they are out of pocket. In October 2008, the alcohol license for Vino Venue was revoked for non-payment. STRIKE 1
March 2007 proved to be just as "promising" for the young company. Just one month after the media blitz on Vino Venue, Brunton Vineyards announced it's intent to acquire the 150 acre Napa vineyard Bellisimo in a $16m all cash transaction, and, for $16.5m, it was going to purchase Jeriko Estate, a vineyard and winery in Mendocino. Brunton's plans for these vineyards, was revealed in online articles: "The company said it plans to increase Jeriko's production capacity from its current 25,000 cases a year to over 100,000 cases." On Bellisimo: 'This acquisition has been long coming and epitomizes the type of property that we aim to have as our flagship property," according to Geno Brunton, CEO of Brunton Vineyards, "acquiring a property of this stature and grape growing capability can only be a sustainable asset for our company in the long-term."'
How was all this going to be orchestrated? The Seven Investment Group (a company operated, possibly created by Brunton) and its partners would secure financing for the long-term financing strategy of BVYH. In an article dated May 14, 2007, one of the partners in this joint venture is listed as Hilltop Vineyard Group. I could not find anything about this "strategic partner" online, and I'm beginning to wonder if the company even exists. The other partners mentioned are" Ascot Chase and several other banks and venture capital firms." Together they would raise funding for BVYH. Brunton Vineyards reported it received $40m for its 2nd quarter in 2007 with subsequent funding to follow, to allow for the purchases of the vineyards and the expansion of Vino Venue.
It was later revealed that these big plans of acquisitions did not materialize. In a small, almost unnoticeable article in the Wine Business Insider, (Vol 17 No. 24 - June 12, 2007) it was noted "...talks broke off when the company [Brunton Vineyards] failed to meet the terms of the agreement [for Jeriko purchase]. Another deal announced by Brunton involving a vineyard purchase in Napa [Bellisimo] also didn’t close." And.. “They announce they’re buying these different properties, and nothing happens,” one knowledgeable source said.
(http://lib.calpoly.edu/staff/fvuotto/research_corner/wine/winebusinessinsider/wbiv17n24.pdf)
If no purchases or expansions happened, what about the $40m dollars? Was that amount ever raised or transferred, and if so, what was it used for?
Notably, Brunton Vineyards makes announcements for all its intended acquisitions but is absolutely silent when it fails to follow through. Leading one to ask whether this is all smoke and mirrors. For a company that states "We just don't believe in hype," when every announced plan does not pan out, it can only be viewed as hype.
Bellisimo was eventually purchased by a Chinese rice company for $14M in April 2008.
Also interesting is the fact that Brunton Vineyards only has office building addresses. One in Irvine, and prior to that, in San Francisco, begging the question - where do they grow and harvest those wine grapes? If Brunton Vineyards does in fact fill wine orders, my best guess is that they are nothing more than an import /export business for generic wines from other vineyards and wineries. This also seems more realistic when we have a vendor claiming that he wasn't paid for the wine ordered by Brunton. STRIKE 2
Just to be fair, let's for a minute give Brunton the benefit of the doubt. Perhaps, with closer investigation, Brunton Vineyards discovered it was not in its best interest to proceed with these plans. Then, why not also announce (through its media affiliate BCC) the decision to back away because it is not the right deal for the company? All is fair in love and war. Again, I don't know the reason, but there is a definite benefit to having all the online hype about acquisitions and expansions and practically nothing on its failure to close any of the deals. Speculators, looking to buy stock may not be able to tell that these intended acquisitions did not become assets of Brunton Vineyards.
Let's not forget that at the same time, (February 2007) BVYH was also reporting that it would sponsor a Nascar team, partnering with Moonshine Racing, a division of BCC Sports (another Brunton Company). NASCAR reports that it costs anywhere from $400,000 per race to $15m per year to sponsor a team. I guess we'll never know if this sponsorship actually did happen. I'm skeptical given the way the Jeriko and Bellisimo acquisitions were handled...but that's just me.
So that's a little of the story on Brunton Vineyards. What about Geno Brunton, the man behind all of this? He is linked to (the creation of?) several other companies. I'll only name a few: BCC News (media); The Seven Investment Group; Trinenergy Corp... each with subsidiaries and partners created by the companies (ex. Moonshine Racing; Infinitus Financial?; Brunton Vineyards, Inc............. you get the idea). The questions to think about: Are they all operating companies? What can they tell us about Geno Brunton?
In a press release by Brunton Vineyards on July 25, 2008, The Seven Investment Group comes up again. It states "Brunton Vineyards (BVYH), a San Francisco - based wine company today announced that it has engaged The Seven Investment Group [TSIG], an Irvine, CA venture capital firm to advise it on investment banking matters as the Company continues to grow. TSIG has agreed to assist the company in its funding efforts by orchestrating relationships with its financing partners. For several months, two such firms out of Scottsdale, AZ, Infinitus Financial and LAAMUSAMX have been working with TSIG and Brunton Vineyards in the procurement of both debt and equity based financing. TSIG will also assist BVYH in providing the right firm to sponsor and file SEC Form 15c211 (Form 211) listing application with NASDQ on behalf of Brunton Vineyards as it seeks to up-list to the NASDAQ."
This piece is filled with ambiguous statements. Nothing from the previous year 2007 would indicate that "the company continues to grow" based on what I've found. Nothing can be found online on Infinitus Financial and LAAMUSAMX and to date Brunton Vineyards is not listed on NASDAQ which the article further indicates is "the immediate goal" of Brunton Vineyards. Geno Brunton is also the CEO of The Seven Investment Group. Who else does the Seven Investment Group have as a client? It gets even more interesting when we follow the trail.
One client of The Seven Investment Group, currently listed, is PracticeXpert, Inc.( aka Practicexpert PXPT). This company was formally Thoan Communications, Inc. The name was changed to PracticeXpert in July, 2003. In April 2001, two directors of Thoan Communications were removed to allow for the appointment of two presidents of Thoan subsidiary companies. Geno Brunton was one of them. He was appointed president of Castpro some time prior to April 2001, (a Thoan subsidiary) and was made a director at Thoan Communications. Castpro was a company that provided webcasting services. One company using the services of Castpro was ZiaSun. ZiaSun was a Hong Kong based company with a number of porn websites and phone chat lines. The company moved to San Diego in 1998 while keeping operations in Asia. It has been suggested that ZiaSun Technologies was involved in questionable practices involving Regis Possino, a debarred California attorney, convicted drug dealer, con man with a widespread conspiracy to defraud investors, and a laundry list of illegal business dealings. In July 2001, while Geno Brunton was president at Castpro, Possino was reportedly running the daily affairs of Adnan Khashogi's (the arms dealer) bank. One of the stocks that Khashogi's bank was pushing was Castpro / Thoan Communications. Interestingly, a company where Possino was a majority shareholder, recommended purchase of stock in another company he owned.
From April 2001 to April 2003, Castpro under Thoan Communications was promoted by Micro-Cap News (MCN) operated by Bryan Kos and his crew. Kos, among other things, has been linked to illegal "pump and dump" stock promotions with a profile on the Register Of Known Spam Operations that state "Normally spams for hire using free websites or "fake free websites" that either he or a spamming partner run. Normally spams porn and illegal stock hyping schemes." Kos's main company is internet Opportunities aka IOPS (Internet Optimized Promotion Services) aka Internet Promos LLC aka BK Ventures aka XTR Capital Resources, LLC based in Canada.
IOPS provides "investor relations services" a euphemism used to describe their illegal "pump and dump" scheme.
http://www.junkfax.org/fax/profiles/wsp/wsp.htm
One discussion online, on Thoan (THAO) , referred to it as a boiler room stock. The Micro-Cap writer Tom Heysek is one of several others along with Bryan Kos, involved in a penny stock pump and dump scheme in the US that defrauded hundreds of people out of over $20 million dollars. The link below includes the promotion by Micro-Caps and lists Geno Brunton under Top Level Management of Thoan.
http://siliconinvestor.advfn.com/readmsg.aspx?msgid=17565628&srchtxt=Heysek
During the time Geno Brunton was president of Castpro, employment taxes for the first and second quarter of 2001, as well as the year 2000 were not paid. The IRS notified Thoan in 2003 about the penalties and interest assessed at $30,000. Litigation was also brought against PracticeXpert formally Thoan / Castpro in 2002 by the landlord of the building where the company had it's corporate office until May of 2002. The unpaid rent amounted to $212,000. How many months of not paying rent would rack up a bill of $212,000? Castpro (after filing bankruptcy) eventually settled with the landlord for $20,000.
Brunton resigned as President of Castpro and as a director of Thoan on August 20, 2001. Seven days later, the original founders of Castpro sued Thoan and three other senior officers in the California Supreme Court for breaching a settlement agreement, breaching fiduciary duties and intentionally interfering with their right to sell or transfer their share of the company's common stock. Thoan settled out of court .
All this looking into just one other Brunton-run company. STRIKE 3
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