The front gate of Castello Winery had been in an uproar since early morning. Under normal circumstances, nearly a hundred workers would have been coming and going to wrap up the year’s farming with the harvest, but unfortunately, the people who had come here were not here for that purpose. Trucks belonging to wholesalers demanding refunds and reporters from wine magazines looking to snatch up sensational headlines had surrounded the gate in layer after layer.
In the end, Joseph Haggins appeared. There was no trace of the man who had put on airs at a three-Michelin-star restaurant in New York a month ago. Even so, he was still the seasoned old fox who had ruled Napa for decades. To hide his haggard complexion, he put on dark sunglasses and stood before the microphones.
“Chairman Joseph Haggins! Please say a word about Robert Parker’s judgment that the wine was defective!”
“Is it true that the entire stock of Emperor will be discarded? How do you plan to restore Castello’s brand credibility going forward?”
It would have been natural for him to shrink back, but Joseph did not waver.
“Castello’s tradition will not collapse because of a single tasting. I cannot say what sort of management issue there may have been with the one bottle of Emperor Mr. Robert Parker drank. However, let me make this very clear: Castello’s second lines, ‘Bianco’ and ‘Rosso,’ are receiving the highest praise in restaurants all over the world even at this very moment. Emperor was merely an experimental challenge. Castello’s roots remain healthy. We will not back down.”
There was certainly a clever aspect to his rhetoric. By dismissing the flaws of Emperor, which had been regarded as the first line, as either a management problem with an individual bottle or a side effect of an experimental challenge, he sharply lowered expectations for Emperor. And by emphasizing the soundness of the popular second lines, he was trying to preserve the existing brand of Castello Winery.
In fact, murmurs rose even among the reporters gathered at the scene. Considering the value of the To Kalon vineyard that Castello possessed and the distribution network it had built over decades, there were not many who believed that this enormous castle would collapse overnight. In the eyes of outsiders, Castello was still a massive fortress.
“Then should we take it that there are no plans for a re-evaluation?”
“…This interview is over.”
He avoided the eyes of the reporter who had asked the most decisive question and went back inside. He could not bring himself to reveal that every wine used to make Emperor was the same, leaving him unable to attempt a re-evaluation. And the moment he returned to his office and shut the door, Joseph’s mask of composure twisted miserably.
“Damn it… those fools!”
Joseph threw the thick financial report lying on his desk to the floor. The debt situation of Castello Winery, unknown to outsiders, was weighing him down.
The bonds worth seventeen million dollars that Brian had bought from the bank. The interest expense Joseph had to bear each month on those alone was beyond imagination. Castello had its reliable second-line wines, as well as quite a few high-priced wines, but the problem was that the world had still not recovered from the Lehman crisis.
With the entire wine market in a slump, the only breakthrough had been a score close to a perfect one from Robert Parker. Only that could have led to Emperor, priced at nearly eight hundred dollars a bottle, selling out—and only then could he have repaid that enormous debt.
But now that Emperor had fallen apart like this, even if there were thousands or tens of thousands of cases of second-label wines piled up in the warehouse, they would not turn into money. For all practical purposes, it was correct to say he was finished.
“A way… There has to be a way…”
No matter how hard he racked his brain, no solution came to mind. He knew all too well how cold the logic of finance was. His accounts receivable had become uncollectible, and the value of his collateral had fallen. If he failed to repay the seventeen million dollars within three years, all of Castello, including the fertile soil of To Kalon, would legally pass into Brian’s hands.
He was slowly realizing that the only choices left to him now were to dry up and die gradually while waiting for bankruptcy, or to admit defeat while he could still salvage even a penny.
At that moment, Matthew cautiously opened the office door and came in. He was holding a travel bag.
“Father… I need to go to Europe for a while.”
For a moment, Joseph’s temple twitched, unable to understand what his son had said.
“Europe? What are you talking about in the middle of this chaos?”
“I’m going to look for investors. If I meet with my connections in Bordeaux and sell part of Castello’s shares or find a cooperative model, we might be able to get through this crisis.”
Matthew’s voice, full of fear, was trembling. Joseph stared straight into his son’s eyes. There was no sign there of any grand goal like attracting investment.
“Hah. You’re going to attract investment?”
“Yes. I’ll meet people however I can. I’ll try to bring in investment somehow.”
“What valuation are you putting on the winery?”
“What? Well…”
“How much equity are you planning to hand over?”
“Uh…”
“How will you propose an exit after the investment?”
“……”
It was clear he had no plan at all. From the look of it, he was simply running away because he lacked the courage to face the pouring criticism, the creditors’ demands, and the results of the mistakes he had committed.
Joseph knew his son cared greatly about what others thought of him, so he understood that Matthew must be under tremendous psychological pressure right now. He was deeply disappointed in his son and found him pathetic, but at the moment, he had neither the energy nor the desire to persuade him.
“Go.”
Joseph waved his hand weakly. Matthew, perhaps relieved, brightened in the eyes and hurried out of the room without even answering. Listening to the sound of his son’s footsteps running down the corridor, Joseph felt a deep solitude. There was no heir to inherit the empire he had devoted his entire life to building. All that remained were a mountain of debt, a name stripped of honor, and Brian sharpening his claws to hunt him down.
Joseph made his decision. The longer he dragged things out, the more the interest would swell and the more Castello’s value would fall. If he entered sale negotiations immediately, he could at least secure some cash as a sort of retirement fund and perhaps retain even a portion of To Kalon’s shares in an honorary capacity.
“It’s me. Can you spare some time now?”
After making an appointment over the phone, Joseph drove himself. Without even bringing a chauffeur, he crossed beyond Castello’s boundaries and headed for Redwood Winery.
The harvest site at Redwood Winery was the complete opposite of Castello’s funeral-like atmosphere. Under the warm sun, the rich scent given off by freshly harvested grapes hung thick in the air.
“Damn it…”
Joseph Haggins, who had felt as if the world were collapsing on the way here, felt his steps grow lighter the closer he got to the winery. Once he made up his mind to settle things, it felt as though the stone that had been pressing down on his chest had vanished.
---
“Welcome, Chairman Joseph.”
As I took off my gloves and approached, Joseph slowly climbed up the hill, breathing hard. The short distance he had walked to get here must have been, for him, a sorrowful march across the empire he had spent his whole life building. Paradoxically, however, his eyes were clearer than I had expected.
We sat facing each other at a small outdoor table beside the warehouse where boxes of harvested grapes were stacked. Warren quietly came over, set down two glasses filled with freshly pressed grape juice, and gave us privacy.
Joseph was the first to take a bundle of documents from inside his coat and set them lightly on the table as he began to speak.
“I have always lived doing my best. The obstacles and crises that came before me, I always broke through them. Each time, there were choices that may have seemed somewhat reckless to others, but I resolved them well. Perhaps that was why I believed this one would be easily resolved too.”
“……”
“This time, it didn’t go well. But I don’t regret it. I believe it was the best action I could take.”
Hearing that, I knew Joseph had done something to the wine. Even so, I did not look down on him or laugh at him. If he said it had been the best choice he could make when driven into a corner, then I believed that I, an outsider, had no right to condemn him.
“I also think it’s unfortunate.”
“Whether those words are sincere or not is not important. In any case, from my standpoint, if things are to be settled, I think it is better to settle them now rather than drag out the full three years. What do you think?”
It was not a bad thing for me either. Not for any other reason, but because if he, in despair, neglected the management of the vineyard, that fine land might be ruined.
“I agree.”
“Then let’s not waste each other’s time. These are the documents for that wretched seventeen million dollars in bonds you bought from the bank, and the asset transfer agreement for Castello Winery that my lawyer reviewed. But my retirement must be guaranteed. Leave me the second-line wines piled up in the warehouse and ownership of some parcels. You know full well the winery is worth far more than seventeen million dollars, don’t you?”
Joseph was desperately trying to secure his share. But I closed the documents he had handed me and spoke calmly.
“Chairman, I have no intention of reducing you to a pauper, nor do I intend to take only the empty shell of the Castello name. I will propose a financial agreement that allows both of us to win.”
“Win-win?”
“Yes. First, I will acquire one hundred percent of your shares in Castello Winery and ownership of every parcel of To Kalon. In other words, both management rights and asset rights will belong entirely to me. In exchange, I will forgive the full seventeen million dollars in bonds. Also, I will transfer ownership to you of all the second-line wines currently in the warehouse, excluding Emperor. Sell them yourself and convert them into cash.”
If the inventory piled up at Castello Winery were sold at regular prices, it would amount to an astonishing ten million dollars, so on the surface it seemed as though I had made an incredibly generous offer. In reality, however, clearing warehouse inventory all at once was by no means easy. Especially not after the wine market had shrunk as it had now. If that had been easy, he would not have fallen into despair and thought of handing over the winery first.
It would be difficult right away, but if sold slowly over time, it could be cleared within five or six years. Even that, however, assumed that Castello Winery’s brand recognition would not fall further than it already had.
“That is not all. I will pay you a five percent royalty every year on wines made from grapes grown on Castello’s estate. The more profit I make while operating Castello, the more dividends will return to you. Along with the title of honorary advisor.”
This condition must have been exceptional, because I could see the calculator spinning in Joseph’s head.
Even if he insisted on management rights, it was obvious he would go bankrupt within three years due to the interest burden. But if he accepted my proposal, he would be debt-free, possess assets capable of generating ten million dollars, and receive permanent royalties.
Even so, this offer was not good only for Joseph. From my standpoint as well, I would be obtaining the finest vineyard in Napa Valley completely, through offsetting bonds alone, without putting up any cash immediately.
“A five percent royalty… Not a bad condition.”
“I expect not.”
It was more than merely not bad. In truth, even if one operated a winery, there was a limit to how much could be taken out every year as fixed personal funds. If he continued receiving five percent under the name of royalties, then in terms of personal funds alone, there would likely be little difference.
Moreover, considering the various difficulties that arose every year while operating a winery and the unpredictable situations caused by climate change, he might be better off letting go and earning money while sitting still.
“You are tempting me to become a well-fed pig.”
It had already become practically a foregone conclusion that he would have to hand over the winery. That was why he had intended to obtain at least some of the land and attempt a comeback. If that proved impossible, he had even considered holding out for three years, selling off all the assets afterward, and then dealing with the seventeen million dollars. The winery would be cut to pieces, but in any case, the cash that ended up in his hands would certainly be much greater.
But now that I had come out with these terms, he could not help but sink deep into thought. Should he completely give up all the land, or hand over every bit of land and live without worrying about his old age…?
“Hmm…”
Joseph was silent for a long time. Then, with a trembling hand, he lifted his glass and drank the grape juice. As the sweet, rich liquid slid down his throat, the taut tension within him snapped.
“It seems I have run out of strength now.”
At last, Joseph gave an empty laugh and signed the agreement.
“Good. Take the management rights and the fields. You are now the owner of To Kalon.”
As Joseph rose from his seat, he added,
“I will watch what kind of wine you make with Castello’s grapes. That is not a curse. Since things have come to this, I hope there will be good results. For my sake as well.”
“I promise. I will restore the honor of Castello’s vineyards.”
“…I hope so.”
I watched Joseph’s back as he left. In truth, I was quite excited, but I forced myself to calm down. Instead of seventeen million dollars in cash, To Kalon—the noblest soil in Napa Valley—had officially come under my command.