Sonoma's Gundlach Bundschu Winery, one of California’s oldest, files for Chapter 11 bankruptcy

SONOMA, Calif. - Sonoma Valley's Gundlach Bundschu Winery – one of the oldest family-owned wineries in the state – has filed for Chapter 11 bankruptcy.

Opportunity to restructure

What they're saying:

The winery said in a Wednesday release that the decision was made due to changes in the post-pandemic economy, shifts in wine-drinking habits and excessive debt.

The filing will allow the business to restructure its finances "with the assistance of a possible new investor." Gundlach Bundschu Winery said in a statement that it expects the bankruptcy to result in new ownership, though one that would "preserve the winery as an operating business and maintain its historic connection to Sonoma Valley."

Gundlach Bundschu’s winery and tasting room will remain open to guests during the restructuring period.

"With the capital, hospitality expertise and vision to help create the next chapter for the winery, the Bundschu's believe a new partnership will strengthen the winery's platform for building community, tourism and economic growth throughout the North Coast," Gundlach Bundschu Winery said in a statement.

Financial woes

Dig deeper:

Gundlach Bundschu Winery said pre-existing financial problems pestering the company intensified in 2020, just before the COVID pandemic. The winery was purchased in a debt-financed acquisition that year, and the family that owns the business believed that the change would "create a stronger platform."

However, the wine industry instead experienced severe disruptions that Gundlach Bundschu said included changing consumer behavior, declining demand, distributor consolidation, excess inventory and reduced demand for contract production and grapes.

Over the past three years, Gundlach Bundschu Winery has reduced its spending by roughly 40% – or about $6 million – but the business said its debt remains too excessive "for the market environment," leading to the decision to file for bankruptcy.

"This is about creating a fair, court-supervised process that gives this historic business an opportunity to survive, preserve jobs, protect relationships with customers and vendors, and ensure the winery remains a meaningful part of the Sonoma Valley community," said Jeff Bundschu, a sixth-generation family member who runs the company with his sister Katie Bundschu. "We are excited to partner with a family organization that recognizes the importance and value of our family operation to Sonoma Valley."

Nearly 170 years in Sonoma

The backstory:

Gundlach Bundschu Winery – located at 2000 Denmark St. in Sonoma – was established in 1858 when the family acquired the land from the son-in-law of General Mariano Vallejo.

The winery has since survived the phylloxera vine outbreak in the 1870s, the deadly and destructive 1906 San Francisco earthquake, Prohibition in the United States, several wars and many recessions.

"Our family has been entrusted with this land for six generations. We are fighting for the opportunity to help ensure that the seventh generation — and the Sonoma Valley community that has grown alongside us — has a future here," Bundschu said. "This has never been only about a winery. It is about a place, a legacy and a community worth preserving."

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