It is with great sadness to see that David Powell lost control of his Torbreck winery. David has always divided opinion, but there is no argument that he produced exceptional wines, maybe not to everybody's taste, but exceptional nonetheless. I loved the 'Australianness' in these substantial wines. He has also been a great advocate for high quality growers and been a mentor to many in the Barossa.
I am copying below his email where he describes the events from his point of view.
Not from Roennfeldt road, as you may have heard by now. It’s a pretty
sad story and one I want you to hear directly from me. Rumours are already
flying out there and I want to set the record straight. It’s a bit of an essay
but bear with me, we have seven years of history to cover here. Here goes…
Seven years ago, on a Friday night in Atlanta, Georgia, I met US
businessman Pete Kight and his wife Terry who had come to meet me as fans of
Torbreck wines. Discovering that they were heading to Oz that coming Christmas
with their two children, I invited them over for a BBQ if they made it to the
Come December the Kights did indeed make it to the Valley and joined my
then wife and I with my two boys for a great summers night. Over an old bottle
of RunRig the conversation turned to business and I was telling Pete how I had
to somehow raise the money to buy out my then fellow shareholder Jack
Pete surprised me by offering to help, and although I needed a
substantial amount of money, he said if it stacked up he would love to help me
get my business back for my boys and me – I’d told him I’d always seen Torbreck
as a legacy for my sons.
I could not believe my luck, I’d had no idea he was a billionaire. At
the time I also remember thinking of the old saying that if it seems too good
to be true it usually is, however I had my back to the wall so we proceeded
with the deal.
That mistake cost me everything.
My lawyer advised me not to sign the deal that was presented to me, as
there was a clause that would see me lose Torbreck if ever enforced. I told
Pete my lawyer told me not to sign as it stood and needed to be amended. He
responded by saying his lawyers were being over zealous and not to worry, we
needed to get it done and could sort it out later. That he was only doing the
deal to help me get Tobreck back for my family.
Fast forward five years and the time has come as per the contracts for
me to provide Pete an exit from the business. I was given six months to execute
the buyout. And this is where the problem in the contract came into play – if I
could not complete the deal in time my option would expire and he would own
Torbreck. Despite my many protestations during the five years, that problem
clause never was amended. One could take the view that that was intentional…
The deadline was the 27th of July this year and I was close to getting
one of many suitors to sign up. At this stage I believed I only needed another
couple of months to get the deal done – time I believed in good faith that I
had. I’d also spent $250,000 and become deeper in debt to Pete trying to get
the deal done, and was financially very vulnerable. There may have been
significance in that.
So imagine my surprise when working in Sydney, I was told Pete was at
Torbreck. I was summoned home to attend a meeting with him and Torbreck
Chairman Colin Ryan.
When Pete invested in Torbreck I had taken on several million dollars of
the debt personally, including the 1.14 million Colin had made out of the
original deal with Jack Cowin. In my naivety I did not understand the
significance of this. I was about to find out.
I walked in, sat down with Pete and Colin. No pleasantries were
exchanged before Pete told me that my time was up, his shares in Torbreck were
no longer for sale, and the company now belonged to him.
I was told that I was no longer employed by Torbreck directly, but could
have my own company working for Torbreck as a consultant roaming the world
selling wine on commission, and that that commission would be directed back to
Torbreck to resolve the debt I had taken on in signing the deal. If I didn’t take
the ‘job’ on offer, my debt would be called in and I’d be bankrupt.
I asked about my equity in Torbreck and was told that, as per the deal
I’d signed, my equity was gone. I turned to Colin, who I've said publicly was
like a father to me, and asked, ‘What about all the times we spoke about
changing that clause?’ He just shrugged. I have to say that was one of the
greatest betrayals of my life.
20 years of my life, all the backbreaking work of the early days
bringing those beautiful old vineyards back to life. All the heart and soul
poured into my wines, each with their own special character and story. Two
decades of literal sweat, blood and tears, gone. The inheritance I’d built from
nothing for my sons, and the staff who’d become like family. Gone. Just like
I’ve seen the article in Wine Spectator Pete claiming that I haven’t
been responsible for hands-on winemaking since 2006. That’s just complete
bullshit. I’ve been in the Barossa alongside the troops every single harvest
since I founded Torbreck in 1994, and I take full personal responsibility for
the quality of every wine with a Torbreck label on it. Turns out, that was
going to be a problem for me too.
You see, everyone in that meeting knew there was a serious problem with
the next vintage of The Laird – the 2009. Whilst I was away doing the job of
selling wine, something happened in the particular barrel store where the wine
is kept. For the first time in five years the volatile acidity in the wine had
gone through the roof and left unchecked. I took responsibility for it and we
tried to remedy it, but it couldn’t be done. I believe the ’09 wine is
unsaleable at the high price we command for it.
I’ve always maintained that I have no problems selling wines for high
prices and that my benchmark is would I purchase the wine myself. In this case
the answer was no. Pretty easy to offer me a job selling wine on commission
when The Laird is unsaleable, and The Laird is the difference between Torbreck
being profitable or not.
To conclude the meeting I was ordered to take a month’s leave and think
about the new role I was to play. I was also told not to come on company
property other than my house, or talk to the other members of staff, who’d been
told not to talk to me. Neither man shook my hand as I left the room.
The next day my company credit cards were revoked and the following day
my company email was blocked. I found out all the other employees were told
that Pete had bought me out of the company, in the presence of Colin and the
company CFO David Adams. I was astounded that even though they both knew the
truth, they remained silent.
I felt like I was cornered so I packed up my belongings from the house I
had called home for 14 years and moved to a friends’ vacant house on the banks
of the Para River which they are letting me have rent free. I had to leave my
company car and another mate lent me a vehicle. You certainly find out who your
friends are at times like these.
Then I removed all my stuff from the office and Cellar Door. I have been
accused by the new management of pilfering my own property, including the
painting you see on all the Torbreck labels which was painted by my own mother.
I’ve always tried immensely hard to be good to my team, and many of them
have become dear personal friends. In the Wine Spectator article this week, it
was stated that my management style was ‘volatile’. I’m particularly hurt by
that because I treat my team like family, always have. I hope the new bosses
can say the same. Pete’s company took over our sales in the US some time ago. I
still keenly remember writing a sizeable cheque from my own pocket for one of
our salespeople who’d been let go a week before Christmas, after seven years,
with no severance pay. Bankrupt as I am likely to be, I won’t be able to do
that this time around if anything should happen to my Torbreck people and it
breaks my heart to think of it.
The day after I lost everything I received a letter from Colin. It
contained my “resignation” which I was expected to sign. As per my employment
contract, signing that letter would have left me with no severance pay and
completely penniless. That battle is ongoing, but luckily one of Australia’s
top employment lawyers is a big fan of my wines and is helping out free of
charge. I’m incredibly grateful to him and the many friends who’ve rallied
round me at this dark time.
The hardest thing in all of this mess has been telling my two sons their
inheritance is gone. My eldest, Callum, is in France at the moment working for
my great friends Erin and Jean Louis Chave. He expressed maturity beyond his 19
years by telling me, “Fuck that rich bastard, don't worry Dad, when I get home
we will start something up together!”
So it has been great ride, if turbulent at times. Many of you will be
thinking what an idiot to trust someone that much. I agree! I have been accused
of playing the victim, of being dishonest, of being reckless with company
money. If I’m a victim it’s of my own stupidity in signing that deal in the
first place and I'm the first to admit it. The rest though, I strenuously deny.
Money can buy a lot of silence but in the end the truth will always out.
As I sit here looking out over the river in the Valley I love so much,
I’m determined that this will not be the last you have heard from me. Give me a
few years and my son and I will have many great wines for you to enjoy, from
some very surprising vineyard sources.
Thank you sincerely for all for your support over the years. I am
grateful first and foremost for the friends around the world I’ve made as I built
Torbreck from nothing. They can take the company I built but they can’t take my
passion. Torbreck’s just a label now – the future holds better things.