High stakes and alleged fakes – Koch sues Kurniawan
William I. Koch, the billionaire wine collector at the heart of the story The Billionaire’s Vinegar (buy on amazon), has taken yet more legal action in the world of fine wine. In an extensive complaint lodged in Los Angeles court last week, Koch makes some significant allegations. The complaint is available here as pdf and it makes for great reading. In the name of fairness and balance, these are simply allegations and it will be interesting to see how it all plays out. Whether or not you are into the fine and collectible wine market, these are fascinating developments as the cast of characters expands beyond those in The Billionaire’s Vinegar.
Koch alleges that five bottles he purchased through Acker Merrall & Condit were fake. The bottles were: 1947 Château Pétrus, a bottle of 1945 Comte Georges de Vogüé Musigny Cuvée Vielles Vignes, 1949 Lafleur, and two bottles of 1934 Domaine de la Romanée-Conti. Koch paid Acker $77,925 for the five bottles, purchased through private sales and auctions. He now claims they all came from Kurianwan but that source was not stated at the time of purchase.
Koch maintains that Kurniawan was the source of two Acker auctions in 2006 hailed only as from “THE cellar.” The two auctions grossed over $35 million. The complaint points to this LA Times profile of Kurniawan, which describes his preferred wardrobe is jeans and gray tshrits but that he has a Bentely and a Ferrari. The article also says that he got into wine only in the year 2000 but had already amassed a cellar of 50,000 bottles and that, “Since he started buying, prices for rare wine have skyrocketed.”
In reference to the two 2006 auctions, the filing says, “Buying and selling the same wine at the same time could also be an effort to manipulate wine prices, a scheme to pump up the price and then dump wine into the inflated market.”
Koch’s filing also states that Kurniawan owed Acker and Acker clients $10.4 million as of a November 2008 court proceeding. Acker accepted fine art and wine as collateral. Emigrant Bank also lent Kurniawan $3 million, according to the filing, and sued Kurniawan to get it back.
The filing also elaborates on sales of magnums of 1982 Le Pin and 122 bottles of red Burgundy from Domaine Ponsot. However, both sets of wines were withdrawn after winery principals raised doubts about the authenticity of the wines. Jancis Robinson has since called Laurent Ponsot “Burgundy’s Sherlock Holmes.” But where Kruniawan got those bottles remains unknown.
And to think that the movie rights for The Bilionaire’s Vinegar have already been sold! Looks like they’d better get working on the sequel already…
On September 19th, 2009 at 7:17 pm ,1WineDude wrote:
Ohhh…. I’m gonna need to go fire up some popcorn for this reading!…
On September 21st, 2009 at 11:54 am ,Erol Senel wrote:
This is great stuff! There was just a spot in Wine Spectator about Broadbent suing the publisher. Great article!
http://www.winespectator.com/webfeature/show/id/40637
He seems the be the real loser in this whole thing. Ever since reading this book, it has been hard to take him seriously. What a shame, but too much of the industry has been “honor code” for too long.
On September 22nd, 2009 at 5:42 pm ,James wrote:
Koch is a douche. He’s got every right to be mad but he’s a douche. Anyhow.
Issue 1, didn’t everyone know those Acker sales were Rudy before the opening bid? It was like Zachy’s Greenberg sale. No one was supposed to know, so naturally everyone knew.
Issue 2, taking an asserted claim as demonstrative fact is absurd. Only after watching birds did I learn how to fly, so therefore I can fly.
Issue 3, it’s unreasonable to assume that houses are going to have gone through that rigorous of a screening at the beginning. Christie’s started forcing credit checks and references. But that was after the fact. And it makes me not buy from there. It’s all a bit absurd in my mind. Also, enough of the petty and childish shadow accusations.
Issue 4 (point 9) really what you’ve done here is paint a spoiled kid with no concept of money getting caught being too greedy. If anything, you’ve painted a picture of a financially desperate man who was careless since he owed so much money. Also, 2 lots caught, how many sold vs how many accused of being fake? I would say that the implication here hurts since the numbers will probably end up being less substantial than accused of. Thus painting the picture of a man in financial trouble.
Issue 5 (point 11) – Is there any law against trying to raise the price of an unregulated collectible? Isn’t value determined in this instance by whatever the buyer wants to pay? Certainly it’s unethical, but illegal? Really? I would be surprised. Merus might be in trouble soon.
Issue 6 (point 12) From everything I’ve read , there was something like less than 1% of all wines Koch bought from the houses that were presumed/proven fake? Am I wrong?
On September 24th, 2009 at 7:49 am ,Mark Golodetz wrote:
James, if somebody steals one per cent of your assets, I don’t think you would be too happy. Even if Koch has more money than you, why should he be content to let it ride.
I have no problem with what Koch is doing. he has brought out one of the dirtier secrets of the wine industry and he has the means to try and hold somebody accountable for it.
I suspect over the next few months, we will see some interesting revelations as the court case develops, particularly as Koch’s resources seem unlimited.
On September 24th, 2009 at 8:37 am ,Dr. Vino wrote:
Hi James,
Perhaps you copy/pasted your remarks from somewhere else but I just wanted to clarify that I did not present the allegations as fact here. Please note the use of “alleged” in the title, and this from the first graf: “In the name of fairness and balance, these are simply allegations and it will be interesting to see how it all plays out.”
I agree with Mark that they suits are largely a good thing for the collectible wine market since it really shines a bright light on the issue of fraud and that will presumably bring greater transparency, accuracy and accountability.
On September 24th, 2009 at 12:31 pm ,James wrote:
Mark,
I did say he was right to be mad. He just presents himself as a spoiled child, is all. Personally, I think he’s right about this, but I don’t have to like the manner in which he conducts himself or the investigations. He’s mad and wants someone, anyone, to pay. And that’s dangerous to people who may have done no wrong at all. Calling him a douche was a little childish but I’ve had this strong feeling about him ever since I read the book. Koch is just all rage. Everyone else and the reality of a matter be damned until he has his way. My gut feeling is as right as he is, he’s just as wrong.
Doc,
Sorry never meant to imply you were presenting the issues as fact – I was just posting my thoughts to the document and I stand by my knee-jerk reactions as an armchair lawyer.
I just thought about this, actually, the way the book tells the story of Rodenstock and the way this document portrays Kurniawan is almost the exact same, no?
On May 6th, 2011 at 4:01 pm ,Dave Erickson wrote:
Bill Koch is becoming my favorite irascible billionaire.