Client story: Kimbolton WinesJune 5, 2019
Many family businesses struggle with the concept of passing the business, operations and assets down to the next generation. Judy and Len Case from Kimbolton Wines weren’t sure how best to create a structure that recognised the role of their son and daughter, Brad Case and Nicole Clark. So they contacted Oreon Partners to help.
Family has been central to the Kimbolton vineyards since its inception, with a wine label now operating for over 20 years: Brad and Nicole are the fifth generation of vignerons in the business. The vineyards are situated in Langhorne Creek, less than an hour from Adelaide on the shores of Lake Alexandrina. All of Kimbolton’s wines received over 90 points in the 2019 Halliday Wine Companion.
An effective succession plan
When the family first contacted Oreon Partners, the business had reached a point where Brad and Nicole were effectively running the operation. They didn’t have any equity in the business, and bank covenants over their parents were stifling growth. All family members wanted to establish a plan that would ensure the vineyard business and wine label continued to grow and thrive.
Oreon Partners first met to discuss objectives in detail, gaining a proper understanding of succession issues and opportunities. Several meetings followed, with a focus on recognising everyone’s individual wishes. There were various business and fixed assets involved, so it was important to form a coherent plan. All of this culminated in a family meeting where all of the benefits, risks and costs of the proposed strategy were explained.
Dealing with all of the challenges
Many different elements were involved in the plan, and Oreon Partners proposed solutions to the following challenges:
- Tax – managing the impact of capital gains and income tax, and also how to deal with Stamp Duty
- Bank debt – Oreon Partners assisted with the refinancing needed to take into account the revised structure and ownership
- Entity ownership and transfer issues
- Estate planning – detailed recommendations including wills, powers of attorney and care directives
- Final equity distribution between children upon transfer, alongside ways to protect the parents’ assets.
The role of Oreon Partners went well beyond work on the financial and legal issues, extending to crucial practical support. We explained management roles within the operating business and supported the family all the way through the actual restructuring process. This included arranging land transfers with the conveyancer; negotiating and restructuring finance with existing bankers; establishing various entities for Brad and Nicole to hold and manage their assets; and instructing a solicitor to transfer various family entities.
After over a year of in-depth support, all family members were pleased with the outcomes, and Kimbolton Wines is going from strength to strength. Recently, Brad and Nicole have been able to successfully carry out plans to develop their new cellar door – an architecturally designed space made from re-purposed shipping containers, with sweeping views across the family-owned vineyards. New ideas and new wines have been rewarded with several trophy wins.
Our congratulations go to the whole family, for a well-conceived and well-executed succession, and we wish them success in their future business endeavours.
If you would like to discuss succession or any other business issues, we can offer our expertise. Contact Oreon Partners.
More on Kimbolton Wines: www.kimboltonwines.com.au
Author: Chris Gebhardt