Sam's Wine pays $300,000 in settlement

Follow up to previous posts (Sam's Wine Investigation, and Two Minds re Sam's Wines), this suit got settled for basically a case of watery domestic, and Sam's agreeing to close for 3 days in a time of year when everyone is hung-over and swearing off the booze anyway. Well, some of us.

Sam's Wine pays $300,000 in settlement

After a 17-month stalemate over the state's allegations that Sam's Wine and Spirits was extorting money from liquor distributors and operating an illegal marketing firm and warehouse, the giant liquor store has agreed to settle the case, Illinois Liquor Control Commission officials said Monday.
Sam's agreed to pay a record $300,000 fine and shut down for the first three days of 2007, state regulators announced Monday.

If the Lincoln Park retailer pays the fine on time it would end a nearly two-year investigation into its business practices. If the case had gone to hearings on the citations, regulators had promised to seek revocation of the store's liquor license. Sam's has annual sales of about $60 million at the Lincoln Park location.

Sam's President Darryl Rosen said the family-owned company is relieved to move on.

“Our position up front was that we did nothing wrong and that's still our position,” Rosen said, pointing out that the settlement language allowed the company to stop short of admitting wrongdoing. It did acknowledge the state had evidence to substantiate some of its claims.

He said the decision to settle now was an admission that the ongoing legal battle was too taxing and distracting for the company, and the risks of losing the case were too great.
....
According to the state's initial complaint, Sam's set up a company called Skyline Marketing Co. to extort money from liquor distributors, requiring them to make payments to Skyline if they wanted to sell their products at the store.

The state alleges that Sam's illegally paid business expenses, including some employee salaries, out of the income Skyline received from distributors. Liquor laws prohibit retailers from having marketing relationships with liquor suppliers.

Rosen maintained Monday that Skyline, which maintained its office in the store's building, had no direct ties to Sam's.

Sam's has developed a national reputation among wine connoisseurs with the volume and variety of its stock.

Since the investigation began, the Rosen family has branched out with new stores in Downers Grove and Highland Park.

The settlement calls for the store to pay $150,000 by cashier's check immediately, and another check for the same amount by Dec. 29 of this year. If Sam's fails to pay the fine, the state will suspend the firm's license for another four days, according to the agreement. Rosen said that he had already paid the first $150,000 and would pay the rest when it is due in December.

If the rest of the fine is paid, Sam's will be closed for business Jan. 1-3, 2007, according to the agreement. Coming right after the holiday rush, Rosen said those three days are not big revenue days.

glad that's settled then.

(update: d'oh! Gaper's Block stole my bit by writing it first!)

Tags: Chicago, /drinking, /litigation