Newly built KY bourbon distillery going up for sale to pay off $34.5M in debt
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- Bankruptcy judge ordered Luca Mariano Distillery sold to satisfy $34.5M debt
- Sale may include real estate and more than 6,000 bourbon barrels in rickhouse
- SummitBridge is the largest creditor; multiple contractors hold construction liens
A U.S. Bankruptcy judge in Michigan on Jan. 14 ordered the sale of a bankrupt Kentucky distillery that was finished just last summer.
Luca Mariano Distillery in Danville will go up for bids after an agreement was reached with lenders and several local businesses with liens on the property.
In addition to the distillery, the assets may include the real estate as well as more than 6,000 barrels of bourbon in a rickhouse on that property.
The parent company of the newly built craft distillery entered bankruptcy in July 2025, just ahead of a hearing in Boyle County on whether to send the property to a master commissioner’s auction to pay off liens from construction. In November, Luca Mariano joined LMD in bankruptcy.
The distillery owes more than $34.5 million, mostly to SummitBridge, which purchased the original loans from Truist Bank.
Other major creditors of LMD Holdings include contractors Doss & Horky of Danville, more than $2 million; Farm Credit of Elizabethtown, more than $2 million; Farm Credit Leasing of Louisville, almost $2.2 million; Keystone Industrial, more than $1.2 million; Schardein Mechanical of Louisville, $531,000; Insulation Solutions of Elizabethtown, almost $370,000 and Hayslett Mechanical of Harrodsburg, almost $273,000.
How Luca Mariano Distillery will be sold
Bids on the distillery are due no later than 4 p.m. Feb. 27, according to an order signed by Judge Paul R. Hage. A sale notice will be published in a national publication, such as the Wall Street Journal, to solicit interested parties.
A hearing to approve a potential sale will be held at 11 a.m. March 10 in U.S. Bankruptcy Court in the Eastern District of Michigan in Detroit.
The debtors also are authorized, if necessary, to conduct an auction of assets at 10 a.m. March 2. A stalking horse bid may be filed to prevent lowball offers, according to the court.
What happened with the distillery
Luca Mariano was founded by Francesco Viola, who said in July 2025 he planned to reopen the distillery.
Viola envisioned creating a “Napa Valley of bourbon” in Central Kentucky.
The brand launched with sourced whiskey and planned top begin distilling its own products in 2025 but apparently ran out of cash.
In a statement to the Herald-Leader in July, Viola said he filed for bankruptcy “to maximize the value of the assets for all stakeholders. Luca Mariano Distillery and LMD Holdings have a successful business model, have weathered the prior economic challenges in our industry, and are poised to emerge successfully, ideally with the support of its employees, customers, community and creditors.”
Kentucky bourbon, other distillers in trouble
The financial difficulties come as Kentucky’s $9 billion bourbon industry is facing increased economic pressure from declines in domestic demand, as well as slumping exports.
This has led to a dramatic slowdown in whiskey production and layoffs in the industry. In December, Jim Beam confirmed its homeplace distillery in Clermont would shut down for all of 2026, although distilling would continue at another Kentucky distillery
Luca Mariano was one of at least three Kentucky distilleries facing claims of unpaid debt last year. In April, Garrard County Distillery in Lancaster was placed in receivership with $2.2 million in liens and remains shut down; Truist Bank claims Garrard County owes more than $26 million. Meanwhile, a $1.7 million lien was filed in May against Whiskey House of Kentucky in Elizabethtown over a contract dispute with a builder.
Other whiskey brands, including Uncle Nearest in Shelbyville, Tenn., and Kentucky Owl bourbon, have also landed in financial jeopardy. Uncle Nearest is now in the hands of receiver after defaulting on more than $100 million in loans to a Kentucky lender.
Kentucky Owl and its parent company, Stoli Group, have been in bankruptcy protection for more than a year. A Texas judge scotched a plan to pay off more than $78 million in bank debt by selling barrels of bourbon, saying the plan was “unfeasible” because of the “frozen” whiskey market.
