Bankruptcy and re-emergence
In 1917, H. Upmann's U.S.-based property and asset investments were seized by the Custodian of Alien Enemy properties, and the firm was placed on the U.S. Enemy Trading List. To compensate for the loss of these assets and the suspension of bank operations, Hermann Upmann had invested heavily in speculative currency investments and Mexican oil properties, using funds obtained from depositor assets without the consent of the depositors.[2][12] After a rumored attempt to escape Cuba by airplane, on 1 May 1922, Hermann and Albert Upmann were arrested and charged with bank fraud by the Cuban Attorney General, after bank examiners discovered that US$2,000,000 in depositor securities had been fraudulently sold or transferred.[13][14] While in jail, Albert Upmann claimed he had no knowledge of the firm's banking activities, stating that he had confined himself to management of the firm's tobacco manufacturing operation.[15] Both brothers eventually relinquished their personal balances and claims with the firm for the benefit of creditors, and fraud charges were dropped against Albert Upmann, who later moved to the USA.[16][17] Hermann Upmann was later released on $100,000 bail, and criminal charges were dropped in October 1922.[8] Although Hermann Upmann lost most of his fortune and his position as an influential Cuban financier and businessman, he managed to save a few of his properties after collapse of the H. Upmann bank.[8] He died in Havana on 3 September 1925.[18][17][8]
By May 1922, both the H. Upmann Bank and the Upmann cigar operation were in bankruptcy. That same year, J. Frankau & Co, one of H. Upmann's licensed agents for the United Kingdom, bought the H. Upmann cigar brand and factory at auction for 30,000 Cuban pesos, and after a three-year negotiation with Upmann creditors, managed to restore cigar production under the H. Upmann brand.[19] In 1935, J. Frankau was purchased by J. R. Freeman & Son, who found it difficult to manage a Cuban cigar company from London. In 1937, the company was sold to the recently established Menéndez, García y Cía Co., makers of the Montecristo brand.[2] J. Frankau retained the rights to H. Upmann in the UK as part of the deal. Menéndez y Ciz continued production of H. Upmann cigars until the nationalization of the tobacco industry after the Cuban Revolution on 15 September 1960.[20]
The night before US President John F. Kennedy signed the Cuban embargo, he had aide Pierre Salinger procure every box he could gather from Washington, D.C. tobacconists, totalling 1,200 cigars.[21]
