Vodka maker Stoli files for bankruptcy in US after ransomware attack
Stoli Group's U.S. companies have filed for bankruptcy following an August ransomware attack and Russian authorities seizing the company's remaining distilleries in the country.
As Chris Caldwell, the President and Global Chief Executive Officer of Stoli USA and Kentucky Owl, the two Stoli Group subsidiaries, said in a Friday filing, this comes after the August attack severely disrupted its IT systems, including its enterprise resource planning (ERP) platform.
The cyberattack also forced manual operations across the group, affecting key processes such as accounting, with full recovery not expected until early 2025.
"In August 2024, the Stoli Group's IT infrastructure suffered severe disruption in the wake of a data breach and ransomware attack," said Caldwell.
"The attack caused substantial operational issues throughout all companies within the Stoli Group, including Stoli USA and KO, due to the Stoli Group's enterprise resource planning (ERP) system being disabled and most of the Stoli Group's internal processes (including accounting functions) being forced into a manual entry mode."
Caldwell added that the incident also prevented the Stoli U.S. subsidiaries from providing financial reports to lenders who claimed the two companies had defaulted on a $78 million debt.
One month earlier, in July 2024, two distilleries valued at $100 million, the group's last remaining assets in Russia, were also confiscated in connection with the designation of the Stoli Group and its founder, Yuri Shefler, as "extremists."
This designation was related to their humanitarian aid efforts and marketing campaigns supporting Ukrainian refugees during the ongoing war in Ukraine.
The Stoli Group has also spent dozens of millions of dollars as part of a long-term court battle spanning over 23 years and multiple jurisdictions, including the United States, with Russian state enterprise FKP Sojuzplodoimport over rights to the Stolichnaya and Moskovskaya vodka trademarks.
This legal struggle stemmed from a March 2000 executive order by President Vladimir Putin to "reinstate and protect the state's rights" in vodka trademarks whose rights were bought by private companies in the 1990s.
Shefler, the company's founder, was also forced to flee Russia in 2002 due to politically motivated and "fabricated" charges linked to his criticism of the Putin regime. Since then, Shefler was later granted asylum in Switzerland and UK citizenship after Russia's extradition requests in the 2010s were denied.
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