Historic Winery Files For Bankruptcy
California's Oldest Family Winery Files For Bankruptcy Following $37 Million Debt
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Key Points
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The winery’s 2020 acquisition was specifically the property that became Abbott’s Passage, a second site near Glen Ellen developed with reservable bocce courts and mid-priced wines as part of a pre-pandemic expansion strategy.
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The prospective investor was described as a “family- and community-oriented owner-operator of an experiential consumer brand,” although the investor’s identity has not been disclosed.
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CEO Jeff Bundschu said the company had already contributed family capital, negotiated with lenders and pursued an investment or asset sale before concluding that an out-of-court agreement was not possible.
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The winery is encouraging customers to continue visiting during the restructuring and plans to proceed with scheduled events, including the Soundcheck live-music event on Sunday, Oct. 4.
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Jeff Bundschu acknowledged the impact of the filing on employees, vendors, lenders, customers and the surrounding community, writing that the family entered the process with “great humility and remorse” over the company’s financial distress.
Gundlach Bundschu, California's oldest family-owned winery, filed for Chapter 11 bankruptcy after accumulating more than $37 million in debt. The 168-year-old Sonoma institution, founded in 1858, became overleveraged following a debt-financed acquisition in 2020 as wine consumption declined and tourism collapsed post-pandemic.
The sixth-generation Bundschu family will retain a minority stake while negotiating with an undisclosed investor described as a "family- and community-oriented owner-operator." The winery and tasting room remain open during restructuring, though the company cut its workforce from 120 to 63 employees and shut down its Abbott's Passage offshoot.
A Risky Expansion Amid Industry Headwinds
The winery's troubles began in 2020 with an acquisition that created Abbott's Passage, a second site near Glen Ellen featuring reservable bocce courts and mid-priced wines. Spokesman reported the expansion was part of a pre-pandemic strategy, but market conditions shifted dramatically. Wine consumption fell, Wine Country tourism dried up, and the debt burden became unsustainable.
Steep Cost-Cutting and Workforce Reductions
Gundlach Bundschu responded to financial strain by cutting operating costs by more than half. The company reduced its workforce from 120 to 63 employees and decided to close Abbott's Passage's Glen Ellen facility in October. AOL noted these moves came after the family had already invested additional capital and negotiated extensively with lenders.
Family Resolute on Staying Connected During Restructuring
CEO Jeff Bundschu acknowledged the personal toll of the filing on employees, vendors, lenders, and the community. The family entered the process "with great humility and remorse," he stated. Despite the Chapter 11 filing, the winery is encouraging customers to keep visiting and plans to proceed with scheduled events, including the Soundcheck live-music event on Sunday, October 4.
Long Path to Restructuring With Investor Backing
The Bundschu family explored out-of-court options before filing for bankruptcy protection. Yahoo News reported they pursued investment or asset sales but determined Chapter 11 was necessary. An unidentified investor, described as family and community-focused, will help reshape the 168-year-old business while the Bundschus retain partial ownership.
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