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Vineyard's $1,653,915 account receivable from Winery as of
December 31, 1990, comprised amounts due for the purchase of the
following vintages and varietals of grapes:
Cabernet Sauvignon
Vintage Sauvignon Chardonnay Blanc Merlot
1986 $7,311 $1,528
1987 45,413 10,436
1988 167,513 $10,177 23,218
1989 315,245 229,177 $80,224 49,590
1990 347,070 213,360 90,143 63,510
By the end of 1990, Winery had paid only $60,196 with respect to
its 1989 grape purchases, which totaled $734,432, and had paid
nothing for its 1990 purchases.
Interest Payments by Winery to Vineyards
Vineyards charged Winery interest on the unpaid receivables
from Winery, but Winery paid none of that interest during 1982 or
1983. Beginning in 1984, Winery paid Vineyards some of the
interest that had been accruing on Vineyard's receivables from
Winery. Pursuant to addenda to the subordination agreements
executed by Vineyards that were dated November 14, 1985, and
March 31, 1986, Vineyards was permitted to collect interest from
Winery on the receivables due from Winery at the rate of 12
percent. Vineyards acknowledged, however, that payments of
interest were allowed only to the extent they did not jeopardize
Winery's ability to meet its obligations to the Bank of America.
Interest payments continued until 1986, when Bank of America
required Winery to cease accruing interest on Vineyard's
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