88-year-old vodka, whiskey brand navigates Chapter 7 liquidation | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

In bars, I often notice people asking for a specific liquor when ordering, paying attention to the brand rather than just the type of drink. It’s a small detail, but it shows how much these brands matter in everyday drinking habits.

That prevents you from getting well liquor or a brand you may not like.

For some U.S. drinkers, Stoli was their vodka of choice, and that brand has moved from a Chapter 11 bankruptcy reorganization to a Chapter 7 bankruptcy liquidation.

“Their creditors no longer believe the companies can successfully fix their finances and keep operating under Chapter 11 bankruptcy, which is meant to reorganize a business and keep it running, according to court documents obtained by Fox Business.

That creates a very uncertain future for the brand and means that people who order a vodka tonic with Stoli or who specify the brand for other drinks won’t be seeing the brand on bar or store shelves.

Oren Bitan, partner and co-chair of the litigation department in Buchalter’s Los Angeles office, answered some questions asked by TheStreet via email.

Stoli moves into Chapter 7 bankruptcy

TheStreet: Why couldn’t the brand find a buyer?

Oren Bitan: It’s less that they couldn’t find a buyer, but rather that Stoli couldn’t secure the approval of secured creditors for the restructuring plan. They started in Chapter 11, a restructuring as opposed to a liquidation.

The biggest hurdle in these cases is getting buy-in from the secured creditors, who, aside from the judge, control the process. It appears that Stoli tried to reorganize itself and its debt with the secured creditor to come out of the bankruptcy with an approved plan, but the secured creditor successfully objected and blocked it.

TheStreet: How did the company move into Chapter 7 bankruptcy?

Bitan: Stoli, on its own, then elected to convert the Chapter 11 to a Chapter 7 liquidation, and now a trustee will be appointed to sell the brand. In the initial stages, it was less about finding a buyer, but now it’s going to be.

What’s next for Stoli and liquor sales?

TheStreet: What happens to any remaining inventory?

Bitan: It’s IP-protected inventory, because we’re talking about bottles with labels, so it will be sold with the brand, presumably.

TheStreet: Is the slowdown in beverage sales real?

Bitan: There is no dispute that liquor sales are down. This is due to several factors, including that younger generations are not drinking as much as their older counterparts. Reducing alcohol consumption is also reportedly an unexpected side effect of popular GLP-1 drugs.

(NielsenIQ [NIQ] released “The Halftime Report,” a beverage alcohol scorecard measuring the front half of 2025. It found that total beverage alcohol sales are down 3% year over year, totaling $53 billion, for the 26 weeks ending July 5, including the initial Fourth of July impacts.)

(The U.S. National Library of Medicine has published peer-reviewed studies showing that GLP-1 receptor agonist drugs can reduce alcohol consumption and alcohol-related harms.)

TheStreet: Do you expect more big-name failures?

Bitan: I think it is inevitable that there will be more big-name failures. On the wholesaler side, there’s a lot of consolidation happening — for example, the Republic National Distributing Company (RNDC) has been losing brands and territory. I think we can expect more consolidation to come, both on the supplier side, which is the brands, and the wholesaler side, which is the distributors.

Stoli’s situation presents a very unique set of circumstances, like its dispute with the government of Russia over a manufacturing facility after claims of a major cybersecurity breach. Still, overall, it’s difficult for a single brand to change overall consumer habits.

More Bankruptcy:

TheStreet: Will someone buy and relaunch the brand?

Bitan: As Stoli is a well-known brand, I think a buyer could be likely, but only time will tell. For the right price, I assume someone would bid for it, but it will be in the hands of the trustee to market and find a buyer for the brand.

Stoli’s Chapter 7 only impacts the U.S. maker of the brand.

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Stoli U.S. bankruptcy and liquidation

Stoli Group USA and Kentucky Owl filed for Chapter 11 bankruptcy in the U.S. after financial struggles, including declines in demand and a ransomware/cyberattack that disrupted operations, according to a Stretto Public Filing.
Creditors moved to convert the Chapter 11 cases into Chapter 7 liquidation, meaning assets and inventory could be sold to repay debts, according to Kirk O’Neill at TheStreet.
Creditors argue that the reorganization failed and want a court order to sell assets under Chapter 7, forcing the liquidation of inventory and other property, reported Fox5DC.
Original Chapter 11 petition filed in November 2024 in the U.S. Bankruptcy Court for the Northern District of Texas, according to a Stretto Public Filing.
Stoli Group’s U.S. operations will be overseen by a Chapter 7 trustee if the conversion is approved, with liquidation managed through the bankruptcy process, according to Kirk O’Neill at TheStreet.
International and non-U.S. operations are not part of the U.S. bankruptcy proceedings and remain operating normally.

FAQ: Chapter 7 Bankruptcy for businesses

Stoli is following a formal process, which works the same way for any business that files for Chapter 7 bankruptcy protection.

Questions: What is Chapter 7 bankruptcy?Answer: Chapter 7 is a form of bankruptcy where a business stops operations and liquidates its assets to pay creditors. Unlike Chapter 11, there is no reorganization plan according to U.S. Courts Bankruptcy Basics.

Question: What happens to a company’s assets?Answer: A Chapter 7 trustee is appointed to sell the company’s assets. Proceeds are distributed to creditors in a legally defined order (secured creditors first, then unsecured), added U.S. Courts Bankruptcy Basics.

Question: Does the business continue operating?Answer: No. Most businesses cease operations immediately once Chapter 7 is filed. Employees are usually laid off, and contracts may be terminated, according to U.S. Courts Bankruptcy Basics.

Question: What happens to creditors and debt?Answer: Creditors can file claims with the bankruptcy court. The trustee distributes proceeds based on priority. Some debts may not be fully repaid if assets are insufficient, according to Cornell Law.