Cyberattack Drives Stoli Subsidiaries into Bankruptcy

Two American subsidiaries of Stoli Group—Stoli Group USA and Kentucky Owl (KO)—have filed for bankruptcy. According to documents submitted on November 29, 2024, the companies’ combined debt amounts to $84 million. Among the primary causes of their financial distress was a large-scale cyberattack that occurred in August of this year.

The attack incapacitated the Enterprise Resource Planning (ERP) system, disrupting critical operational processes, including accounting. As a result, the companies were forced to rely on manual data entry, significantly slowing their operations. The ERP system is not expected to be fully restored until the first quarter of 2025.

These IT challenges also hampered the fulfillment of credit obligations. The company was unable to provide creditors with up-to-date financial data, leading to accusations of debt covenant breaches.

Other factors contributing to the financial difficulties include reduced demand for alcoholic beverages in the post-pandemic period and the impact of inflation. The company stated that the bankruptcy proceedings are necessary to restructure debts and maximize asset value for creditors.

Stoli Group is an international enterprise engaged in the production and distribution of alcoholic and non-alcoholic beverages. Its products are available in more than 170 markets worldwide.