California’s Oldest Winery Files for Bankruptcy After 168 Years

Gundlach Bundschu Winery, California’s oldest continuously family-owned winery since 1858, filed for Chapter 11 bankruptcy on Wednesday, September 23. The Sonoma Valley producer carries $39 million in debt stemming from a 2020 acquisition and years of declining wine consumption. The winery will remain open during restructuring as executives seek a new investor, though the Bundschu family will likely lose majority control after 168 years.

How the 2020 acquisition triggered the crisis

Gundlach Bundschu purchased Abbott’s Passage Winery, a 60-acre estate, in February 2020 as the business expanded rapidly. One month later, the COVID-19 pandemic hit California. The wine industry has not recovered since. The debt from that acquisition, combined with pandemic disruptions and declining consumer demand, pushed the company into insolvency despite years of cost-cutting efforts.

Aggressive cost cuts failed to prevent bankruptcy

Over the past 18 months, the winery slashed operating costs by more than 50 percent, saving approximately $7 million. It reduced its workforce from 120 employees to 63 and ceased retail sales at Abbott’s Passage in July, closing that Glen Ellen facility in early October. CEO Jeff Bundschu stated in court filings that these measures, combined with family capital contributions and negotiations with lenders, could not produce an out-of-court solution.

Broader wine industry collapse accelerates bankruptcies

Gundlach Bundschu is the latest in a string of well-known California wine producers to hit insolvency. Wine behemoth Gallo announced plans to lay off more than 90 employees by January 2027 and close a major Napa Valley facility. Constellation Brands also announced workforce reductions. Industry-wide wine consumption has declined sharply, driven by changing consumer preferences, trade tensions, and natural disasters including wildfires.

Bundschu family to lose majority control for first time

The bankruptcy restructuring will force the founding Bundschu family to surrender majority ownership after six generations of continuous family control. Negotiations are underway with a large, unspecified possible new investor to keep operations afloat. The family expects to retain a minority ownership interest. CEO Jeff Bundschu told The Times the family plans to remain involved in the business and continue building the brand, despite losing control.

Final Thoughts

Gundlach Bundschu’s bankruptcy marks the end of 168 years of family ownership and signals deepening distress in California’s wine industry. The winery’s $39 million debt and inability to reach a lender agreement forced the court-supervised restructuring. Investors and employees in the wine sector should expect more consolidation and ownership changes ahead.

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