‘Falcon Crest’ at Spain’s top winery

Feud divides Vega Sicilia-owning family as the father fights to hold on to the reins of the business empire

David Álvarez (seated, second from right) with his seven children in their last full family photo taken in 2005.
David Álvarez (seated, second from right) with his seven children in their last full family photo taken in 2005.

For decades, they were the kind of family that likes to stay out of the headlines. They ran the type of company where the owner is referred to simply as "the boss," because there is no doubt who is in charge. For more than 50 years, the members of the Álvarez clan remained faithful to this life of discretion. But the wall of silence has finally cracked, and the public exhibition has begun.

The reason for this is an ongoing four-year court battle between the founder of the internationally renowned Ribera del Duero winery, Vega Sicilia, and five of his seven children. At stake is control over his empire, which also includes Grupo Eulen, a major security and maintenance company. Some of the main players in the conflict ironically note that the plot twists of the famous television series Falcon Crest were nothing compared to their own family feuds.

"David Álvarez never separated the business from the family, and therein lies much of the problem," say sources familiar with the situation. "He is a self-made man who wants things done his way, and he is not ready to accept a secondary role."

In September 2009, David Álvarez remarried for the third time. At age 82 he decided to formalize his longstanding relationship with Maite Esquizábel, his secretary. The couple had plans to enjoy themselves far from the office where they had spent so many working hours. The entrepreneur was ready to leave the business in his children's hands: Juan Carlos, a natural-born leader, was chosen to head the venture as his CEO.

Things exploded when an old aide of the honeymooning father was fired

His seven children -- Jesús David, María José, Juan Carlos, Pablo, Emilio, Elvira and Marta -- attended their father's third wedding. After the death of his first wife and mother of his children, Álvarez had married Teresa Vidaurrázaga, his first secretary and closest aide - people say she helped him grow the business and wielded almost as much power as he did, earning the nickname of "very general" secretary.

Just three years after that second marriage, Teresa passed away, and Maite, who was already working in the secretary's office and was 38 years younger than the boss, soon became the new Mrs Álvarez.

His children were never very enthusiastic about their father's remarriages, even though prenuptial agreements were signed. They had enough troubles with the company, and did not need further cause for conflict. The family got together for the last time at that wedding, four years ago.

Things exploded when Juan Carlos, then CEO, decided to fire Santiago Carrero, secretary general and an old aide of his father's. Carrero, then 75, has been described as a scheming man by sources close to Álvarez's rebellious children. The new boss decided the time had come to build his own team.

But when David Álvarez returned from his honeymoon and learned that Carrero had been fired, the pater familias called a meeting of the board (in which he had a majority stake) to discuss a single item: removing five of his children from the decision-making committee. Pablo, Juan Carlos, Emilio, Elvira and Marta began being referred to by their father as "the unruly ones." Cue a war of executive powers. The five rebels then used their numerical majority on the board to remove their father from his post. Álvarez hit right back, using his stakeholder majority to change the corporate leadership. From then on, there were only two administrators: himself and his faithful daughter María José.

It was Elvira, one of the youngest daughters, who first realized that their father had pushed them out of his entire life, not just his business.

We wen to the the clinic but they would not let us through. I just want to kiss my Dad"

"After he got back from the honeymoon she went over to the house to see the photos. It took him two minutes to show her the door," recalls a family friend.

It was around that time that Juan Carlos, now the ex-CEO, had an argument with his father in which he said: "I don't want to be president of the company, but you don't want to stop being CEO." At that point, the family stopped gathering on the three days out of the year that had been sacred until then: December 24 and 25, and August 29.

All attempts at reconciliation have been useless, not even when the businessman underwent heart surgery a few months ago. "Some of us showed up at Clínica Ruber, but they had orders not to let us through," explains one of the siblings. "I just wanted to kiss my father."

This hostile attitude does not extend to Álvarez's 17 grandchildren, the eldest of whom have even been offered jobs with the company.

The elderly businessman's aides say that he, too, is suffering over the situation. "But he cannot forget how they tried to push him away from the business that he started and turned into a successful venture. They want to steal his prized possession and have the relationship remain the same," says a source close to Álvarez.

Meanwhile, the "unruly ones" say they still love their father, but hold that "he is no longer the man he used to be; he is not well." They also say that "he is getting the wrong advice." His advisers are now his wife and Santiago Carrero.

Despite this situation, the Álvarezs still go on seeing each other every day at work, since both companies -- Eulen and El Enebro, owner of Vega Sicilia -- share the same headquarters in Las Rozas, northwest of the capital. "We run into each other in the parking lot and it's not just that they don't say hello -- they actually don't even look at us," says a family member. All the banished children feel that their father's personality is the main obstacle to a normal running of affairs.

David Álvarez belongs to a generation of self-made businessmen who started from scratch and who firmly believe that nobody can do the job better than themselves. Born in Crémenes, a hamlet in León, his family moved to the Basque industrial city of Bilbao when he was a child. He studied accounting and began hobnobbing with influential people. In the mid-1960s he learned that some companies were going to outsource their cleaning services, and he soon created his first business: El Sol, a cleaning company that was the genesis for Eulen, a general services corporation with 78,000 employees in 14 countries and turnover of over 1.3 billion euros in 2012.

Later he founded El Enebro, which owns several wineries besides the legendary Vega Sicilia (Bodegas Alión, Pintia and Tokaj Oremus). They say that Eulen made him rich, but did not provide the necessary glamour that Álvarez needed to mix it in high society. That is one of the reasons why he bought the Vega Sicilia winery from a Venezuelan businessman. Thanks to its prestigious wines, the family began spending time with prime ministers and establishing links with many politicians. Some of these have even worked for them, such as the eurodeputy Jaime Mayor Oreja, who was at Eulen in the 1980s.

Now that Eulen is back in Álvarez's hands, the conflict has moved on to El Enebro and to the courts, which have already ruled in Álvarez's favor on two occasions. The matter is now in the Supreme Court, whose ruling is expected in early 2014. In the meantime, it is very likely that the Álvarez family will not be spending this Christmas together, either.