Major shareholder of Stoli, Kentucky Owl blames Putin, Fifth Third for bankruptcy
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- Stoli's majority owner urges court to approve debt plan despite bank opposition.
- Fifth Third Bank rejects bourbon-based repayment, proposes outside fiduciary.
- Schefler blames Putin, cyberattacks, and bank actions for firm's financial collapse.
In an unusual move, the majority shareholder in Stoli, owner of Kentucky Owl bourbon, is asking a bankruptcy judge to approve the company’s plan to pay off its debt with bourbon, despite objections from Fifth Third Bank.
The debtors do not ask for indulgence; they ask for recognition,” Yuri Schefler wrote in a letter to Judge Scott W. Everett, dated Sept. 22 and entered into the court record Thursday. “There is a plan. It is sound. It is fair. It has not only the overwhelming support of all constituents, but there is no significant, yet alone material creditor — other than the bank — that has not voted in favor of the plan. The future is not yet written, but the debtors are prepared to write it. ... I hope they will have this chance.”
Fifth Third has opposed Kentucky Owl and Stoli’s plan to pay of $78 million in debt with 35,000 of barrels of bourbon plus assorted other spirits and a lien on Bardstown real estate once proposed for a distillery and tourist attraction.
The bank has called it a “dirt for dollars” proposition and said it will leave them on the hook for $60 million. Fifth Third has asked instead for an independent fiduciary to be appointed by the Texas bankruptcy court to take over.
Stoli and Kentucky Owl filed for bankruptcy in November 2024.
In his letter, Schefler wrote that the company stands “at the edge of resolution. Acceptance of the plan will mark the end of uncertainty.”
He blamed injustices of Russian President Putin for decades of financial struggle. “The Stoli Group has survived much, not by accident, but by resilience, by vision, and by a refusal to collapse under the weight of injustice,” Schefler said.
In 2022, Schefler said, when Putin invaded Ukraine, “Stoli did not say silent. ... It sent humanitarian aid. It offered refuge. And for that, the Russian state stripped the group of its final asset on its soil — a $100 million distillery, seized under a veil of legal pretence.
“The very same week — coincidence or choreography? — the company’s servers were crippled in a cyberattack,” he said.
Schefler also blamed Fifth Third, saying the bank “tightened its grip on liquidity not in caution, but in disregard, ignoring what are globally recognized as force majeure circumstances.”
He said the Stoli “opened negotiations, offered compromises and were very close to securing new deals worth up to $50 million — funds that would have enabled repayment of over half of the loans,” and avoided Chapter 11 bankruptcy.
“There would have been no financial harm to the debtors that may be assessed in the hundreds of millions, including at least $10 million of avoidable spend on these proceedings, no losses from delayed production from 250,000 unbottled and undelivered cases, and no lasting damage to the Stoli brand value through retail delistings and the silenced marketing campaigns never run.”
The case is awaiting a ruling from the bankruptcy judge.
