California’s oldest continuously family-owned winery has filed for Chapter 11 bankruptcy with more than $39 million in liabilities, bringing six generations of majority family ownership to an end while the historic Sonoma Valley winery remains open.
Gundlach Bundschu Winery, founded in Sonoma in 1858, entered Chapter 11 Wednesday through its operating company, Vineburg LLC, in the U.S. Bankruptcy Court for the Northern District of California. Court records list approximately $17.2 million in assets and $39.1 million in liabilities.
The restructuring is expected to end the Bundschu family’s majority ownership, although family members plan to remain involved in the winery. The business is seeking outside capital as it reorganizes its finances, and its winery and tasting room are expected to remain open during the case.
Chapter 11 allows Gundlach Bundschu to continue operating while it restructures its debts under court supervision. Major asset sales and any reorganization plan require court oversight, while the filing generally pauses collection actions against the company.
In February 2020, Gundlach Bundschu acquired a 60-acre winery and vineyard property in Glen Ellen for its Abbot’s Passage brand, expanding both production and hospitality. Within weeks, the COVID-19 pandemic sharply disrupted winery visits and the hospitality business the company had just expanded.
The company later faced a broader downturn in the wine business, including declining demand, excess inventory, distributor consolidation, and weaker demand for grapes and contract production, according to bankruptcy filings and a company statement.
CEO Jeff Bundschu told the bankruptcy court that the 2020 expansion left the company exposed just as the pandemic and a weaker wine market began reshaping the business. The company cut expenses by more than 40% over three years, reduced its workforce and closed the Abbot’s Passage tasting room as it worked to stabilize its finances. The Bundschu family also put personal assets into the business, sought outside investment and considered acquisition proposals before turning to Chapter 11.
Court records show much of the company's debt is secured by property and other assets. Its major lenders include American AgCredit and Tiverton Advisors.
Jacob Gundlach established what became Rhinefarm in Sonoma in 1858. Over the next 168 years, the family wine business endured the 19th-century phylloxera outbreak, the 1906 San Francisco earthquake and fire, Prohibition, recessions, and major California wildfires.
Gundlach Bundschu is working with a potential investor who could bring new capital into the winery as majority family ownership comes to an end. The investor has not been publicly identified, and the Bundschu family plans to remain involved in the business.
The winery says it will continue serving wine club members, hosting visitors and holding scheduled events during the bankruptcy. A meeting of creditors is scheduled for Oct. 26, followed by a bankruptcy status conference on Nov. 18 before U.S. Bankruptcy Judge William J. Lafferty.
The case is In re Vineburg, LLC, No. 26-10736, in the U.S. Bankruptcy Court for the Northern District of California.
