Stoli Group USA: Chapter 11 Case Converted to Chapter 7

Stoli Group (USA), LLC and Kentucky Owl, LLC, the U.S. distribution and bourbon brand affiliates of the Stoli Group spirits enterprise, filed chapter 11 petitions on November 27, 2024 in the U.S. Bankruptcy Court for the Northern District of Texas (Dallas Division). The cases, assigned Case No. 24-80146-swe11 and designated complex, opened amid a mix of operational shocks and market headwinds that were widely reported across the spirits sector. Coverage tied the filing to a downturn in U.S. spirits demand after the pandemic, rising costs, and inflation pressures on consumers, alongside fallout from a July 2024 Russian court ruling that labeled the parent holding companies "extremists" and triggered asset seizures, and an August 2024 ransomware incident that disrupted systems across the Stoli Group. The petitions list estimated assets of $100 million to $500 million and liabilities of $50 million to $100 million for the two debtors, with about 50 employees at Stoli USA and none at Kentucky Owl. The debtors' voluntary petitions and companion petition frame the case as a U.S. chapter 11 process for the distribution arm and bourbon brand while the broader global enterprise manages geopolitical and operational turbulence.

Court filings describe Stoli USA as the exclusive U.S. purchaser, importer, and distributor of Stoli products and Kentucky Owl as the bourbon brand affiliate that holds significant aging inventory. The First Day Declaration outlines a prepetition capital structure centered on two revolving credit facilities with Fifth Third Bank, National Association, plus a series of default notices and an acceleration demand in November 2024 that cut off further draws and tightened control over inventory. Kentucky Owl's operations depend on non-debtor affiliates for distillation and finishing, and the filing disclosed roughly 29,000 barrels aging at a third-party Kentucky facility. The debtors sought authority to use cash collateral rather than obtain new DIP financing, secured interim and final cash collateral orders, and filed an amended chapter 11 plan and amended disclosure statement in June 2025. In mid-January 2026, the docket reflects competing motions to convert the cases to chapter 7, highlighting a period of uncertainty about the path forward and signaling potential liquidation outcomes reported in industry coverage.

Debtor(s)	Stoli Group (USA), LLC and Kentucky Owl, LLC (jointly administered)
Case Number	24-80146-swe11
Court	U.S. Bankruptcy Court, Northern District of Texas (Dallas Division)
Petition Date	November 27, 2024
Assets	$100 million to $500 million (petition estimate)
Liabilities	$50 million to $100 million (petition estimate)
Employees	About 50 (Stoli USA; Kentucky Owl had none)
Industry	Distilled spirits / beverage distribution
Claims Agent	Stretto, Inc.

Restructuring overview

The chapter 11 cases began with voluntary petitions filed on November 27, 2024, covering Stoli Group (USA), LLC and Kentucky Owl, LLC. The debtors also filed a First Day Declaration describing their roles within the broader Stoli Group and the liquidity constraints that led to a cash collateral process rather than new debtor-in-possession financing. A cash collateral motion followed within days of the petitions, and the court entered an interim cash collateral order on December 3, 2024 and a final cash collateral order on January 17, 2025. As the case progressed, the debtors filed an amended chapter 11 plan and amended disclosure statement on June 25, 2025, setting out class treatment and a proposed payment schedule for creditors under a reorganization framework. The docket also shows a shift in tone by early 2026: the debtors filed an emergency motion to convert the cases to chapter 7 on January 14, 2026, and the official committee of unsecured creditors filed a separate conversion motion on January 15, 2026. These motions did not, by themselves, convert the cases, but they mark a point where liquidation alternatives were actively presented to the court.

The cases were designated complex, a common step for multi-debtor chapter 11 filings with large creditor bodies and cash collateral disputes. The core financing decision was to operate under secured lender cash collateral rather than pursue a new DIP facility, which shaped the budget discipline and reporting cadence in the first months. Filing coverage in late November 2024 highlighted the U.S. arm's decision to seek court protection amid distribution challenges and market pressure, with reports noting that Stoli Group USA and Kentucky Owl filed for chapter 11 in Dallas and sought to continue operations while addressing secured debt and vendor relationships. See the initial filing coverage from Bloomberg and Fox Business.

Key milestones.

Core filings and case documents.

Business overview and operating footprint

Court filings describe Stoli Group (USA), LLC as the exclusive U.S. purchaser, importer, and distributor of Stoli products within a vertically integrated global spirits and beverage enterprise. The debtors maintained offices in New York, and the broader Stoli Group used production facilities across multiple countries, including the United States. The filings also describe Kentucky Owl, LLC as a bourbon brand affiliate focused on reviving the Kentucky Owl bourbon and rye portfolio, with production and aging handled through non-debtor affiliates. These descriptions appear in the First Day Declaration, which serves as the primary court narrative about operations.

Industry reporting adds context to the brand portfolio and corporate history. The Stoli brand has been marketed globally as a vodka label, while Kentucky Owl is positioned in the American whiskey segment. News coverage around the filing noted the company's 2022 rebrand from Stolichnaya to Stoli, a move tied to the Ukraine invasion and the company's effort to distance the brand from Russia. The company's production footprint has been anchored in Latvia since 2000, and reporting notes that ingredients are sourced from Slovakia, a detail that underscores the international nature of the supply chain supporting a U.S. distribution business. Those context points matter for a chapter 11 case centered on U.S. distribution: inventory, sourcing, and global logistics can influence liquidity and working capital requirements during restructuring.

While Stoli USA serves as the U.S. importer and distributor, its product mix includes both vodka and whiskey categories that were under pressure in 2023 and 2024. Industry data pointed to broad declines in spirits volumes, and category-specific forecasts showed vodka and American whiskey facing multi-quarter declines. These trends are relevant because they shape how quickly distributors can move inventory and how much working capital they need to sustain promotional activity and brand support. Coverage from The Drinks Business and CBS News framed the chapter 11 filing against softer demand and cost pressure, while the company's own operational challenges, including a cyberattack and geopolitical fallout, added company-specific strain.

Operating roles by debtor.

Kentucky Owl production flow (as described in court filings).

This operating model places a large share of inventory value in aged barrels held at third-party facilities. The declaration notes that vendor letters from the secured lender limited the sale or removal of inventory without consent, a constraint that can slow the conversion of barrel inventory into finished goods and cash. For a bourbon brand where aging spans multiple years, barrel inventory functions as long-duration collateral, and lender control over that collateral can be a central point in cash collateral negotiations.

Capital structure and lender dispute

The First Day Declaration describes a capital structure anchored by revolving credit facilities with Fifth Third Bank, National Association. Stoli USA and Kentucky Owl each had separate senior secured revolvers that collectively funded working capital and inventory needs. The lender held a first-priority lien on substantially all assets of each debtor and asserted cross-collateralization and guarantees between the two entities under 2023 joinder agreements.

Revolving credit facilities at the petition date.

The declaration reported total funded debt of approximately $78.37 million as of the petition date. It also described a sequence of default notices from July through October 2024, followed by a November 13, 2024 acceleration demand. The lender sent letters to Kentucky Owl's storage vendors on October 29, 2024 instructing them not to sell, remove, or transport inventory without the lender's written consent. The filings state that the lender declined to permit further draws under the revolvers, which reduced liquidity and pushed the debtors toward a cash collateral structure for ongoing operations and case expenses.

These lender actions are central to the case's narrative: the debtors needed to maintain inventory, pay vendors, and manage a distribution business while their primary lender asserted control over collateral and accelerated the debt. That tension shows up later in cash collateral terms that tightly control budget variances, reporting, and collateral protections.

Industry coverage of the filing also summarized the largest creditors listed in the petition schedules, highlighting the range of trade and operational exposures in the spirits supply chain. See the creditor list summary.

Industry reporting noted that the U.S. operations were navigating softer demand and higher costs at the same time that secured lender actions tightened liquidity. A U.S. importer and distributor is especially sensitive to working capital swings because inventory and receivables are the principal operating assets. The filings show that revolver access was restricted months before the petition date, and that the debtors were negotiating with the lender during that period. In practice, those constraints make it more difficult to fund marketing, move inventory, and service distributor relationships, even before a company enters chapter 11.

Cash collateral framework

The debtors did not pursue a new debtor-in-possession financing facility, instead relying on cash collateral from existing secured lenders. The court's interim cash collateral order and final cash collateral order established the operating and reporting framework used through the case. These orders set budget controls, variance thresholds, reporting obligations, and a carve-out for professional fees, while granting adequate protection through replacement liens and superpriority claims.

Core terms from the interim cash collateral order.

These terms reflect a case funded by collateral proceeds rather than new money. For a distribution business with significant inventory, the variance limits and reporting requirements effectively tied daily operations to lender oversight. The carve-out was the primary professional fee protection and functioned as a ceiling on estate-funded costs in a downside scenario.

Case administration and claims process

The debtors sought authority to retain Stretto, Inc. as claims, noticing, and solicitation agent early in the case. The claims agent application outlines a typical claims administration scope: Stretto would receive and docket proofs of claim, maintain the official claims register, provide a public electronic interface for filings, and serve notices to creditors and parties in interest. The proposed orders authorized Stretto's engagement under 28 U.S.C. section 156(c), which allows bankruptcy courts to use external facilities for administrative services, with costs paid by the estate rather than the U.S. Trustee program.

From a case administration standpoint, a claims agent centralizes creditor communications and provides a single recordkeeping hub. That role is particularly important in a complex chapter 11 that includes multiple debtors, secured lender disputes, and plan solicitation activity. The appointment also enables the court to move efficiently through notice requirements for cash collateral hearings, bar dates, and plan voting, while giving creditors a consistent channel to obtain copies of filings and verify claims status.

The Stoli Group USA docket reflects ongoing administrative activity into 2026, including hearings tied to conversion motions and contested matters. While the claims process may not be the headline in a consumer-facing brand case, it is the infrastructure that allows the restructuring to function and that determines how general unsecured creditors are notified and paid. The claims agent appointment is also the anchor for the required FAQ on claims administration and can be useful to creditors looking for official notices and case updates.

Plan process and proposed claim treatment

The debtors filed an amended chapter 11 plan on June 25, 2025, along with an amended disclosure statement. The amended plan outlines class treatment for priority, secured, unsecured, and equity interests. The plan treats priority claims and other secured claims as unimpaired, while the senior lender and Bardstown Bourbon Company claims are impaired with customized repayment structures. General unsecured claims are scheduled for installment payments over 18 months with plan interest.

Amended plan class treatment (summary).

The plan's treatment of the Bardstown Bourbon Company secured claim highlights the importance of aged barrel inventory as collateral, while the senior lender's options for collateral return or SPV participation underline the secured lender's central role in the restructuring. The amended disclosure statement provides the narrative for these treatments and the assumptions behind the proposed distributions.

The amended plan also reflects a multi-year horizon for secured debt repayment, with amortized payments projected through the end of 2027 for the senior lender secured claim. That timeline is notable for a distribution business operating in a volatile demand environment, because it extends repayment obligations well beyond the immediate downturn. General unsecured claims are slated for 18 months of equal monthly payments with plan interest, which implies a structured payout rather than a single distribution event. These features are typical of a reorganization plan that seeks to preserve operating value while spreading repayment over time, but their feasibility depends on inventory turnover and distributor demand trends.

Market and geopolitical pressures

The Stoli Group USA filing intersected with a broader period of weakness in the U.S. spirits market. Industry data from the Wine & Spirits Wholesalers of America's SipSource program pointed to a third consecutive negative year for core spirits in 2024, with rolling 12-month depletion declines across major categories. Vodka, a core Stoli category, was forecast to decline by 5.15% in Q4 2024, and American whiskey faced an even sharper projected decline by mid-2025. These metrics provide context for distributor revenue pressure, inventory turnover, and promotional intensity during the period in which Stoli USA entered bankruptcy.

SipSource market indicators cited in industry reporting.

Company-specific shocks compounded the category downturn. Media coverage described a July 2024 Russian court decision that labeled the parent holding companies "extremists" and led to the seizure of remaining Russian assets, alongside a separate narrative about the company's EUR 38 million support for Ukraine that Russian authorities cited in the designation. These developments intersected with a high-profile 2022 rebrand from Stolichnaya to Stoli and a long-standing production footprint outside Russia. In August 2024, the company experienced a ransomware attack that reportedly created substantial operational issues and delayed systems recovery into 2025. Reporting also emphasized that the category faced softer demand after the pandemic, with lower spirits volumes and heightened price sensitivity among consumers.

The geopolitical narrative around the Stoli Group was a recurring theme in coverage of the filing. Reports described the Russian court actions, the seizure of Russian assets, and the company's position that its global operations were already outside Russia. Articles about the filing and the rebrand highlighted the effort to distance the brand from Russia after the invasion of Ukraine, and industry coverage tied the August 2024 cyberattack to operational disruptions expected to persist into early 2025. See the related reporting from Yahoo Finance, The Drinks Business, and The Spirits Business.

Together, these factors created a challenging operating environment for a U.S. importer and distributor dependent on inventory flow, working capital, and stable logistics. The chapter 11 case became the mechanism for managing secured lender pressure, stabilizing inventory, and proposing a long-term repayment structure in a market that had not yet stabilized.

Frequently Asked Questions

What is Stoli Group (USA), LLC?

Stoli Group (USA), LLC is the exclusive U.S. purchaser, importer, and distributor of Stoli products within a global spirits and beverage enterprise. The company maintains offices in New York and serves as the U.S. operating arm for Stoli-branded products. This role is described in the debtors' First Day Declaration.

What is Kentucky Owl, LLC?

Kentucky Owl, LLC is the bourbon brand affiliate within the debtor group. It has no employees and relies on non-debtor affiliates for distillation, aging, and finishing. Court filings report roughly 29,000 barrels of whiskey aging at a third-party Kentucky facility and finishing performed by an affiliated bottling entity, illustrating the asset-heavy nature of the bourbon portfolio even without a large direct workforce.

Why did Stoli Group USA file for chapter 11?

The filing followed a combination of market weakness and company-specific disruptions. News coverage pointed to declining spirits demand after the pandemic, rising costs and inflation pressures, a July 2024 Russian court designation that labeled the parent holding companies "extremists" and resulted in asset seizures, and an August 2024 ransomware event that disrupted systems. These events unfolded against the backdrop of the debtors' lender dispute and acceleration of secured debt obligations, which limited access to liquidity and drove the need for court-supervised restructuring. See coverage from CBS News, Yahoo Finance, and The Spirits Business.

What were the secured credit facilities at filing?

The debtors' capital structure was centered on revolving credit facilities with Fifth Third Bank, National Association. Stoli USA had a $50 million revolver with about $41.03 million outstanding, and Kentucky Owl had a $40 million revolver with about $37.34 million outstanding, for roughly $78.37 million of funded debt in total. The lender held first-priority liens on substantially all assets and issued default notices beginning in July 2024, later accelerating the debt in November 2024. These terms are summarized in the First Day Declaration.

What is cash collateral and how was it controlled in this case?

Cash collateral is the secured lender's cash proceeds that a debtor can use only with court permission and adequate protection for the lender. In this case, the court's interim cash collateral order and final cash collateral order set a budget framework with a 10% total variance limit and 15% line-item variance limit, required weekly reporting, granted replacement liens and superpriority claims as adequate protection, and set a professional fee carve-out capped at $300,000 post-trigger.

What does the amended plan propose for creditor treatment?

The amended chapter 11 plan treats priority and certain secured claims as unimpaired, while the senior lender and Bardstown Bourbon Company claims are impaired with payment structures tied to collateral and amortized cash. General unsecured claims are scheduled for equal monthly payments over 18 months with plan interest. The plan also leaves equity interests unimpaired but without voting rights.

Is the case moving toward chapter 7 liquidation?

In mid-January 2026, the docket reflects motions by the debtors and the official committee of unsecured creditors seeking conversion of the chapter 11 cases to chapter 7. Those filings are captured in the debtors' conversion motion and the committee's conversion motion. Separately, industry coverage reported that the U.S. arm was shifting toward liquidation and that U.S. inventory was expected to remain available for the foreseeable future, underscoring the uncertain endgame for the restructuring. See liquidation coverage and additional reporting.

Is Stoli vodka still available in the U.S.?

Industry reporting in January 2026 said the company maintained sufficient U.S. inventory for the foreseeable future despite the bankruptcy process, suggesting that distribution continued while the court process evolved. See the inventory availability report.

Who is the claims agent for Stoli Group (USA), LLC?

Stretto, Inc. serves as the claims, noticing, and solicitation agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest. The appointment is described in the debtors' claims agent application.

For more restructuring coverage and case updates, visit the ElevenFlo blog.