Vodka giant Stoli Group USA returned to bankruptcy court Friday with a revised restructuring strategy, offering its lender a blend of bourbon barrels, alcohol inventory, and now a real estate lien to partially satisfy its $78 million secured debt.

The modified Stoli Chapter 11 Plan, presented before U.S. Bankruptcy Judge Scott W. Everett, aims to calm lender concerns while keeping the company’s unusual repayment method alive: paying debt with thousands of barrels of unfinished bourbon.

A Bourbon-Fueled Bailout

Stoli’s counsel, Holland O’Neil, told the court that under the updated plan, the company would act as a sales agent for the alcohol inventory. In addition, Stoli pledged a lien on Louisiana real estate owned by a nondebtor affiliate as a safety net for Fifth Third Bank, the secured creditor.

If the bourbon fails to fetch its projected value within 27 months, the bank can seize the property. Stoli still intends for most of the debt to be repaid through 35,000 barrels of bourbon and other finished spirits, with any remaining balance settled in cash installments.

Bank Pushes Back

Fifth Third Bank pushed back, warning that bourbon prices remain weak and insisting it is not positioned to sell liquor. The bank also argued the plan unfairly prioritizes unsecured creditors—who are set to be paid in full with cash—while leaving equity holders untouched.

“Bourbon is not a balance sheet panacea,” bank attorneys cautioned, pointing to valuation disputes that have already forced large portions of the confirmation hearings behind closed doors.

From Ransomware to Reorganization

Stoli filed for Chapter 11 bankruptcy after a 2024 ransomware attack paralyzed operations, compounding an industry slump following COVID-19 and ongoing trademark battles with the Russian government tied to President Vladimir Putin.

The hearing, now stretching into its fifth day, will continue on Aug. 29 as Judge Everett weighs whether the vodka maker’s liquor-backed lifeline satisfies federal bankruptcy law.

Representation

• Stoli Group USA is represented by Holland N. O’Neil, Stephen A. Jones, Mary Rofaeil, Zachary C. Zahn, Ann Marie Uetz, Michael J. Small, and David B. Goroff of Foley & Lardner LLP.

• Fifth Third Bank is represented by Brent R. McIlwain and Christopher A. Bailey of Holland & Knight LLP and Jeremy M. Downs, William C. Meyers, and Steven J. Wickman of Goldberg Kohn Ltd.