Black founders of Healdsburg's Esterlina Vineyards accuse bank of discriminatory lending

Jun 21, 2016

(PD) - Members of a prominent African- American wine family are alleging their bank steered their Healdsburg winery into costly high-interest loans because they are black, triggering a downward spiral that forced them to file bankruptcy and relinquish their winery.

Brothers Eric and Craig Sterling, whose family founded Esterlina Vineyards and Winery, leveled the allegations of discriminatory lending in a new complaint filed last week against the winery’s lender, Bank of the West.

A bank spokeswoman declined to comment Monday on the allegations, the latest salvo in a yearlong legal battle between the Sterling family and Bank of the West.

A U.S. Bankruptcy Court judge granted the bank permission Friday to take ownership of the Healdsburg winery, according to court records.

 

The bank, in turn, is selling the Esterlina production facility, tasting room and 20-acre estate above Dry Creek Valley to vintner Eric Flanagan, according to court records.

The Sterling family, which retained the Esterlina brand and a sister wine brand, Everett Ridge, announced the sale to wine club members on Friday.

“The Esterlina and Everett Ridge labels will be sold in a separate transaction. One of which we hope to be able to purchase. We do not know the plans of either the new facility owners or the new Esterlina or Everett Ridge brand owners (if it isn’t us),” the email stated.

The Sterlings were one of a handful of African-American families to own a winery on the North Coast, where the vast majority of winery owners and top managers are white.

In their fight against Bank of the West, the brothers have hired San Francisco attorney Waukeen Q. McCoy, who represented a group of African-American women in a racial discrimination suit against the Napa Valley Wine Train last year. The women, who were kicked off the train and accused of being overly loud and boisterous, received an apology from the train’s CEO and settled the case in April for an undisclosed sum.

In an interview, McCoy said he wants a hearing in front of a judge to examine the Esterlina loans. He said it may not be enough to allow the Sterling family to regain control of the winery, but he intends to hold Bank of the West accountable for the family’s losses.

“That would be a hefty sum,” McCoy said.

The family entered the wine business in 1995, when Murio Sterling began growing grapes in Sonoma County’s Alexander Valley.

In 2000, Sterling and his four sons purchased a tiny hilltop winery in Mendocino County and launched Esterlina — Spanish for “sterling.” By 2005, it was doing $1 million in sales, according to court records.

They purchased Everett Ridge Winery in Healdsburg in 2006 and moved Esterlina into the facility in an attempt to expand their business.

A series of loans made by Bank of the West to finance the acquisition and operation of the Dry Creek Road winery are at the heart of a cross-complaint filed last week in Sonoma County Superior Court by the Sterling family as they battled with the bank for control of the property.

The family was overdue on $7.2 million in loans from Bank of the West by April 2015, according to a bankruptcy court filing. Craig Sterling, an attorney, and Eric Sterling, a physician, personally guaranteed the loans, according to the court filing.


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