Virginia socialite and winemaker Patricia Kluge, ex-wife of the German-born American media mogul and billionaire John Kluge, has recently filed for Chapter 7 bankruptcy protection not long after striking it out on her own as a winemaker.

Generally speaking Chapter 7 bankruptcy-often called "fresh start" bankruptcy-allows the debtor to keep certain assets, liquidate the rest, and get a fresh financial start.

Kluge Estate Winery & Vineyard-which the couple had attempted to build into a national wine business-was apparently shut down after the couple defaulted on almost $35 million worth of loans granted by Farm Credit Bank. In April, Donald Trump of all people bought out most of Kluge's business with plans to continue its operations.

Sources said Kluge filed for bankruptcy after failing to reach a settlement with several banks over debt arising primarily from business obligations. The banks had apparently foreclosed on Kluge's winery business, which she operated with her husband William Moses, as well as her Albernarle House mansion and a development of luxury homes owned by the couple.

Kluge apparently tried to prevent the bankruptcy by hosting an online auction in which she sold a number of assets, bringing in $15.2 million. But the auction and her other efforts were not enough.

A fancy $4.9 million subdivision by the name of Vineyard Estates was taken back by Sonabank after the couple defaulted on an $8.2 million loan. Apparently the fancy properties at Vineyard Estates were not selling well.

Kluge's current home, Albernarle House, is apparently not a part of that subdivision.

Kluge acquired Albernarle House and its 3,000 acreage during her divorce from John Kluge, who died last September. That property had apparently been used to host luxuriant parties and events for royal personages, businessmen, politicians, celebrities, and artsy types.

The couple's assets are estimated to be between $1 million and $10 million, and their liabilities are estimated to be between $10 million and $50 million. According to their filing, there are between 50 and 99 creditors.

Source: San Jose Mercury News, "Former socialite Kluge seeks bankruptcy protection," Zinie Chen Sampson, 21 June 2011.