Eber Bros. closes, puts headquarters up for sale

Eber Bros. Wine & Liquor Corp. has ceased operations and is liquidating inventories.
The liquor distributorship, meanwhile, remains locked in a court battle with Southern Wine & Spirits of America Inc., the Florida-based firm that earlier this year announced-but twice called off-plans to merge with Eber Bros.
Eber Bros. also has put its headquarters and Rochester-area distribution center on the block. The CB Richard Ellis commercial real estate brokerage lists the property for $4.35 million. The wine and liquor distributor built and moved into the 167,000-square-foot warehouse and office building on an approximately 14 acre site on Paragon Road in Gates in 1998. It relocated from Monroe Avenue in Brighton.
CEO Lester Eber did not return calls for comment this week. A voice mail message on the firm’s Gates headquarters’ telephone states Eber Bros. ceased sales and deliveries to clients as of May 21 and would from that date on be selling off all inventories at “drastically reduced prices” from warehouses in Rochester, Albany and Port Chester, Westchester County.
While not familiar with details of the liquidation, Eber Bros. attorney Paul Yesawich of Harris Beach PLLC said this week that he understood the inventory sale to be in progress.
Wayne Chaplink, Southern chief operating officer, also did not respond this week to requests to be interviewed for this story. Chaplin previously said he expected the merger to close at the end of March and later said it would be completed by the end of April.
Until recently, Eber Bros. was the largest liquor distributor in Upstate New York employing some 500 across the state and more than 100 at its headquarters. It is not clear how many workers are left at the 75-year-old family-owned firm.
Southern in February announced a merger between Eber Bros. and Southern’s New York subsidiary. A now purged press release then posted on the Florida firm’s Web site included a quote from Lester Eber stating that Eber was willing and anxious to join the “great Southern Wine & Spirits team.” According to the February release, Eber was to assume a Southern vice presidency and be responsible for governmental relations.
When the deal failed to close by the March date, Southern COO Chaplin in April blamed unnamed “issues on the seller’s side” for temporarily derailing the merger, which he predicted would close by April 30.
Court papers in a state Supreme Court lawsuit Eber Bros. filed in Monroe County in early 2005 against Southern trace the local firm’s ills to aggressive takeover attempts mounted by Southern in late 2004. The takeover involved a campaign to virtually cripple Eber Bros. by stripping it of key sales staff, Eber Bros. alleges in the court complaint.
An industry giant claiming the mantle of the biggest U.S. liquor distributor, Southern has been gobbling up regional liquor distributors in a number of states at an increasing pace. It operates in 28 states, bringing in some $6 billion in revenues.
The 38-year-old Southern describes itself as “pursuing a determined strategy to expand through internal growth as well as through the acquisition of established wholesalers” and boasts that its “record of expansion and growth is unparalleled in the history of the U.S. wine and spirits distribution business. There is simply no other wine and spirits distributor of similar size and scale.”
In its 2005 court complaint, Eber Bros. accuses Southern and an alleged cabal of former Eber Bros. workers of mounting a conspiracy to eviscerate Eber Bros. by wooing away virtually its entire sales staff. Southern first induced a key Eber Bros. staffer to lead the alleged exodus with a $2.5 million payoff and that staffer then brought colleagues into the alleged plot, Eber Bros. claims in the court brief. The Gates firm seeks a minimum of $20 million in profits it allegedly lost as a result of its slide in the wake of a late 2004 mass walkout in which more than a score of workers quit to go to Southern.
In answering papers, Southern denied mounting any conspiracy. Moves of Eber Bros. staffers over a two-week period in 2004 to Southern’s relatively newly established Upstate New York operation in Syracuse were merely the product of individual decisions to go to a larger and better-paying firm, the Florida company maintained. Former Eber Bros. workers also filed counterclaims as part of Southern’s answer alleging that Eber Bros. had failed to pay substantial bonuses due to them.
Both sides had filed motions seeking summary judgment in their favor. In a ruling handed down July 20, Justice Kenneth Fisher, with the New York Seventh Judicial District Commercial Court, said questions remain in the case that can only be decided by a jury. No trial date has been set.
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08/03/07 (C) Rochester Business Journal