Stoli Group’s US arm shifts to liquidation
The two US entities of vodka maker Stoli Group have filed motions to convert their bankruptcies into Chapter 7 liquidations.
Stoli Group USA and its Kentucky Owl American whiskey unit voluntarily filed for Chapter 11 bankruptcy in November 2024 after suffering “financial difficulties” and a two-month-long cyber attack.
The two US entities have now requested to change their Chapter 11 to a Chapter 7 bankruptcy, which would enable the company to get rid of most of its debts without repayment.
Despite ongoing negotiations and the preparation of a proposed reorganisation plan, the entities were unable to secure terms with senior lenders that would allow them to emerge from Chapter 11.
Under Chapter 7, control of the estates will now shift to a court-appointed trustee tasked with overseeing asset liquidation and creditor distributions.
The filings, made in the US Bankruptcy Court for the Northern District of Texas, follow a year-long effort to reorganise the business amid a slowdown in the US spirits market and a legal dispute in Russia.
According to Luxembourg-headquartered Stoli Group, the liquidation filing is the culmination of more than 25 years of external pressures, most notably protracted legal disputes with the Russian government over brand ownership and control.
Those tensions escalated sharply in recent years following Stoli’s public condemnation of Russia’s invasion of Ukraine, after which the Russian state designated the company an “extremist organisation” and seized one of its key distillery assets – a facility integral to global production.
These geopolitical confrontations were compounded by a major cyber attack that disrupted international operations and degraded critical business systems.
Against this backdrop, Stoli’s US business confronted slowing spirits consumption and a tight credit environment, with parent finance partners reportedly unwilling to offer the flexibility necessary to support a balanced restructuring.
The group has also stressed that the liquidation only affects its US arms. All other parts of Stoli Group’s global footprint – including operations tied to Louisiana Spirits in the US, SPI Spirits (Cyprus) and international production sites in Spain, Italy and Argentina – remain unaffected and fully operational.
The group continues to produce brands such as its Stoli and Elit vodkas, Bayou rum, Cenote Tequila and Se Busca mezcal.
Stoli Group maintained that it has “sufficient inventory” of its brands in the US to meet consumer demand for the “foreseeable future”.
Last month, the group released Stoli Halapeño Pepper vodka, designed for Bloody Mary cocktails.
Despite the move to liquidation in the US, Stoli Group has made several major investments in recent months.
In September, hemp-based alcohol-free ‘spirit’ The Pathfinder secured US$3.6 million in a funding round led by Stoli Group.
A month later, Stoli’s Amber Beverage division acquired UK spirits distributor Ten Locks for an undisclosed sum.
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