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The stakes are high -- in the billions of dollars -- and the lower courts divided. Judges on the U.S. Second Circuit Court of Appeals voted to uphold New York's restrictive laws, while judges on the Sixth Circuit struck down similar laws in Michigan. On December 7, 2004, the U.S. Supreme Court heard arguments in these two cases, one filed by a small Virginia winery against the New York State Liquor Authority, and the other by consumers in Michigan. The justices, led by wine-lover Antonin Scalia -- he's a frequent judge at the annual International Wines for Oysters Competition held at the Old Ebbitt Grill in Washington, D.C. -- seemed inclined to favor the plaintiffs. A decision is expected before the end of the session in June.

Zacharia has his fingers crossed. December 7, he hopes, will lead to something really big. "It's Pearl Harbor Day, you know," he says, grinning.

Ownership in Zachys is divided into 200 shares. Today, Don Zacharia owns but one. "It's hard for me to get used to not having control," he admits. But he knows that he's ensured the transition from one generation of Zacharias to the next. Zachys, he says, "is a family business that works -- which is a rarity in itself. I have friends in business with their children, and it's a disaster." The problems, he thinks, "typically begin with the second generation, when they start fighting among themselves and get the lawyers involved."

Rather than get the lawyers involved late in the game, Zacharia turned to lawyers in the early to mid-1990s. One of the first was Andrew Crisses, a Manhattan attorney who has worked with wine distributors and merchants for over 30 years and is used to dealing with family ownership issues. Crisses serves as a go-between -- "more consigliere than lawyer," says Don -- for all three principals. Crisses sits in on the semiannual gripe sessions, sometimes acting as moderator, and is listed in the partnership agreement as Don's eventual successor as "intermediary," a role he already helps fill.

At the same time, Don Zacharia began meeting with trust and estate attorneys. He had already decided, he says, that his wife, Christina, and his two daughters who play no role in the business would be compensated "very well," but not with company stock. Zachys would pass equally to his daughter Jennifer and son Jeff via grantor retained annuity trusts, or GRATs.

Like charitable remainder trusts, GRATs allow the giver to avoid inheritance taxes. In effect, the donor gives away his stock over time -- six years, in the Zacharias' case -- while retaining fixed annual annuity payments. At the end of the given period, the business ends up in the hands of the grantees and the annuity payments cease. The gift is irrevocable. The process is now complete at Zachys. Don, says McMurray, "owns bupkis!"

"Giving up control is hard for Don," says McMurray. "He's been so hands-on all his life." Driving through a neighborhood of million-dollar houses in Westchester County, McMurray recalls that when he and Jen needed money for a down payment on their house, "Don said yes, just so long as we lived only a few blocks away." Jeff and his wife got the same deal.

One secret to the family's continued success -- and peace -- has been a parceling out of responsibilities. Jeff is the main Bordeaux buyer and the operations guy. McMurray is the Italian wine buyer and the rainmaker. The same willingness of all parties to set boundaries has translated into a series of separate but related businesses. When Jeff and Andrew wanted to buy or rent additional warehouse space -- for years Zachys had stored its hoard of wine in a warren of cramped cellars underneath its show room -- Don refused. "He told us that if we want to do it, fine," recalls Andrew, "but we'd have to use our own money. So we did."

Jeff and Andrew formed their own company, New York Fine Wine Storage, and rented space in a former bakery in White Plains. They opened the doors at Thanksgiving 1997. The warehouse staff is made up of Zachys employees, and most of the inventory belongs to Zachys as well. But when there's room for more -- as there was once the 2000 Bordeaux futures were cleared out -- New York Fine Wine Storage charges private customers for using its state-of-the-art climate-controlled space.

That is no small thing. When a blackout hit New York in August 2003, says McMurray, the backup generator at the warehouse "came on without missing a tick." Expensive wines that could have been damaged by overheating stayed cold.

In the warehouse, a half-dozen or so rooms are stacked floor to ceiling with some of the world's finest wines. Attached to the wooden cases are the names of famous actors, money managers, and some of the richest men in New York who bought their wines from Zachys and are awaiting delivery or are paying to have their wines kept in pristine, air-conditioned storage.

Now "the warehouse is one of D.Z.'s favorite things," says McMurray. "Don loves it because it's visceral. He likes to see the wine, to touch it, to talk with the guys who stack it."

That's not to say Don approves of all the things Jeff and Andrew have done. In the wake of the unionization threat, for example, Jeff brought in a management consultant. At the very mention of the word consultant, Don Zacharia's forehead creases. "I would never have dreamed of doing that," he says. Drumming his fingers on his desk, his face screwed up in a cockeyed grin, his shrewd eyes gleaming, he booms: "I'd have said, 'Get off your f -- -ing asses or get out the f -- -ing door!"

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