FOLLOW US

A historic Sonoma winery is fighting to keep its doors open after a crushing debt burden pushed the family-owned business into bankruptcy court.

Gundlach Bundschu Winery files chapter 11 Wednesday, seeking protection as it restructures more than $39 million in liabilities while continuing to operate. The California winery says the court-supervised process could preserve jobs, maintain relationships with customers and vendors, and potentially lead to a new family partnership and ownership structure.

The move marks a dramatic turn for a business that traces its roots back more than 160 years and describes itself as California's oldest continuously family-owned winery.

Gundlach Bundschu Winery Files Chapter 11 Amid Debt Strain

The winery plans to remain open while it works through the Chapter 11 process, according to a news release.

Jeff Bundschu, who operates the company alongside his sister, Katie Bundschu, said the bankruptcy is intended to create a structured opportunity for the business to survive rather than simply close its doors.

The family is also exploring a partnership with another family organization that could ultimately change the company's ownership structure.

Bundschu said the goal is to protect the winery, its employees and its longstanding connections to the Sonoma Valley community.

A Six-Generation Family Legacy

The Bundschu family acquired the winery property in 1858, beginning a legacy that has stretched across six generations.

In the early 2000s, the winery expanded beyond wine production and developed into a destination featuring hospitality and live music. At its height, more than 65,000 visitors came through its doors each year, according to the company.

That history now hangs over a bankruptcy case that could determine whether the family remains at the helm for another generation.

Bundschu said the family has been entrusted with the land for six generations and is fighting to give both the seventh generation and the surrounding Sonoma Valley community a future there.

He emphasized that the struggle extends beyond the winery itself, describing the property as a place tied to the family's legacy and the broader community.

Wine Industry Headwinds Add to Financial Pressure

The winery's financial problems intensified following a debt-financed acquisition in 2020, according to the company's announcement.

The broader wine market subsequently faced a series of challenges, including declining consumer demand and consolidation among distributors. Those pressures weighed on the business as its debt obligations remained heavy.

The Bundschu family pledged and sold family-owned real estate in an effort to support the winery, but those steps did not eliminate the financial strain.

According to the news release, the family ultimately rejected a financing proposal from lenders and instead pursued a buyer before turning to Chapter 11 protection.

Creditors Include American AgCredit

Vineburg LLC, doing business as Gundlach Bundschu Winery, reported between $10 million and $50 million in assets and between $10 million and $50 million in liabilities in its bankruptcy petition.

The company's largest listed creditors include American AgCredit, which has asserted a claim of approximately $17 million.

An entity affiliated with agriculture investment manager Tiverton Advisors also has a disputed claim of approximately $18 million, according to the filing.

Together, those claims illustrate the financial weight now sitting at the center of the restructuring.

Bankruptcy Court Will Oversee Restructuring

The Chapter 11 case has been assigned to U.S. Bankruptcy Judge William J. Lafferty.

The court-supervised process is expected to determine how the winery addresses its obligations while it continues operating and evaluates potential ownership or partnership arrangements.

For the Bundschu family, the bankruptcy represents an attempt to keep a historic Sonoma institution alive rather than allow decades of family stewardship to disappear under the pressure of debt.

The debtor is represented by Stephen D. Finestone of Finestone Hayes LLP.

As the case moves forward, the winery's tasting rooms, hospitality operations and broader business will continue while the family works through a financial crossroads that could determine who owns the property — and who carries its legacy into the next generation.