LOUISVILLE, Ky. (WDRB) — The parent company of Kentucky Owl bourbon is moving to liquidate its U.S. operations after efforts to reorganize under bankruptcy protection failed, according to a report from Louisville Business First.
Stoli Group USA LLC and Kentucky Owl LLC announced last week they plan to convert their Chapter 11 bankruptcy cases into Chapter 7. The move would place the companies under the control of a court-appointed trustee and begin the process of selling off assets.
The companies initially filed for Chapter 11 bankruptcy in November 2024, saying the restructuring would allow them to continue operating. More than a year later, Stoli Group said it was unable to reach an agreement with its senior lender that would allow the U.S. entities to emerge as ongoing businesses.
Under Chapter 7, a trustee will oversee the liquidation of assets and repayment of creditors. Stoli Group said the decision affects only its U.S. operations and does not impact its global business or other U.S. brands, including Louisiana Spirits.
The bankruptcy has had ripple effects across Kentucky’s bourbon industry. Kentucky Owl previously listed Bardstown Bourbon Co. as its largest unsecured creditor, owed more than $5.5 million. The brand also announced plans in 2022 for a $150 million distillery and tourism project in Bardstown, but construction never began and the project’s future is now uncertain.
Stoli Group cited geopolitical pressures, a cyberattack and a slowdown in the U.S. spirits market as contributing factors. The company said existing inventory is expected to keep products available to consumers in the near term.
The bankruptcy case remains ongoing, with the court set to determine how assets are sold and how proceeds are distributed.
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