By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
In the fall 1998 issue of The Lone Wolf Letter, a promotional newsletter for tobacco retailers, television and film star Chuck Norris and comic actor James Belushi gush over the success of their 2-year-old cigar company. The actors call Lone Wolf one of the most exciting new premium cigar brands to hit the market. They confess that a recent sprinkling of favorable cigar magazine reviews and interest the brand has generated among smokers have exceeded their wildest expectations. They publicize the Beverly Hills launch of their newest cigar lounge in Dennis Overstreet's The Wine Merchant, known as the wine shop to the stars where Hollywood types plunk down thousands of dollars for prestige labels and vintages in a single spree. And they trumpet the success of the Lone Wolf Lounge in Dallas, announcing the addition of Overstreet as investor and operator along with the expansion of the location's fine wine selection.
The letter concludes with a solicitation to potential investors stating that Lone Wolf International is lining up licenses for lounge locations nationwide. But just before the close of the year, their cigar empire began unraveling like a stale stogie wrapper. Lone Wolf Lounge on Cedar Springs closed its doors for good December 22, just days after offering special private wine- and cigar-lounge memberships priced at $50 plus a monthly fee of $50. This one-time rate was slashed from normal membership terms that included a one-time $850 fee plus the monthly $50 dues.
The special membership promotion expired December 21. Then on December 23, Grand Prairie-based Lone Wolf International filed for Chapter 11 bankruptcy protection, listing liabilities of $839,667.32 and assets totaling the same amount. As of this writing, a reorganization plan had not been filed.
Yet it's the circumstances surrounding Overstreet's entrance into the Dallas lounge last fall, his departure several weeks later, and Lone Wolf's eventual closure that could pose difficulties for Norris, star of Walker, Texas Ranger, and his Lone Wolf investors. Former employees say Overstreet may have shipped large quantities of expensive and rare wine from his California wine shop into Lone Wolf Lounge for resale, although Texas law prohibits such shipments. One former Lone Wolf server, who spoke on the condition that he not be identified, said he checked in a large wine shipment from California delivered via an 18-wheeler routed through Houston.
"[What] was kind of off the wall to me was the amounts of wine and the prices they were getting in when their business wasn't up to par yet," recalls former Lone Wolf server and bartender Sara Rabjohns, who now works at Red, Hot & Blue in Plano. "They would get enormous shipments in at one time--and price-wise enormous amounts. We'd all kind of laugh about it like, 'Who the hell you going to sell that to?'" Rabjohns says a few of the bottles were selling for as much as $6,000 each.
"It's bootlegging to bring liquor in from another state and start selling it," says Glen Gary, legal counsel for the Texas Restaurant Association. Gary says that Texas, with rules governing the distribution and sale of alcoholic beverages that are among the most stringent in the country, mandates that all alcoholic beverages move through a three-step distribution channel: beverage producer, local wholesaler, and retailer or restaurant.
"All product that comes into the state of Texas must go through that three-tier system," stipulates Brian Guenthner of the Texas Alcoholic Beverage Commission. "It cannot go from the nonresident seller directly to the retailer." TABC officials say administrative penalties for such violations range from license suspensions to revocation, and criminal penalties include fines of up to $1,000 and up to a year in jail, depending on the quantity and value of the product involved.
Guenthner says it's possible that Overstreet might have obtained a non-resident seller's permit to sell alcohol in the state of Texas, but the TABC has no record of issuing Overstreet or anyone affiliated with The Wine Merchant such a permit. Plus, Texas regulations strictly prohibit any person or company from possessing a significant interest in both a restaurant and a wholesaler simultaneously. As an investing operator of Lone Wolf, Overstreet would be disqualified from such an arrangement under Texas law.
Bob Orenstein, president of Dallas-based International Wine Accessories Inc., whose retail mail-order catalog carried Lone Wolf cigars for a short time, says such regulatory skirting among restaurants and retailers is not unusual in Texas. "The concept of taking wine and changing labels and bootlegging it and all that--it's done every day," he admits. "But most of the time it doesn't happen on a big scale."
Yet two servers claim that Lina Dallas, the person Overstreet tapped as Lone Wolf's manager, instructed them to box up and catalog a large segment of Lone Wolf's wine inventory several days before the lounge was shut down.
As many as 50 12-bottle cases of wine were loaded into an unmarked truck, according to former Lone Wolf servers. Dallas explained that the wine would be moved from the premises to another location to protect the inventory during the Walker, Texas Ranger Christmas party to be held on the premises. "She said she heard they were really rowdy and they might steal or break the wine bottles," said one server. "And I was like, 'Why don't we just store it [downstairs], and when the party's over we can just bring it back up?'"