California's Oldest Winery Quadrupled Its Profit. It Still Filed for $37 Million in Debt.

$37 million. That is the debt Gundlach Bundschu listed when it filed for Chapter 11 bankruptcy on September 23, split between two lenders, Tiverton Advisors and American AgCredit, according to the sworn declaration its CEO filed in the case. Add the $1.7 million it owes vendors and service providers, and the total exceeds what the winery's assets can cover, the specific test that pushed a business that survived the 1906 San Francisco earthquake, Prohibition, and the 2017 Nuns Fire into federal court.

A cost problem the company actually fixed

The winery's own numbers undercut the easy version of this story. Earnings before interest, taxes, depreciation and amortization, the measure lenders use to judge whether a business can service debt, rose from about $800,000 in 2023 to a projected $3.28 million in 2026, Bundschu wrote in his declaration. The workforce fell from 120 employees to 63. Two long-held vineyard leases were dropped, a planned budget label called Gun Bun was scrapped, and the family sold real estate away from the winery itself. Operationally, the fixes worked. The debt still didn't fit.

That debt traces to February 2020, when the company paid $11.6 million for 60 acres in Glen Ellen to build a second label, Abbot's Passage, run by Jeff's sister, Katie Bundschu Tynan. The loan closed two vintages after wildfire losses and weeks before COVID-19 shut down winery visitation nationwide. "In retrospect, the Company expanded at precisely the wrong time and assumed more operational complexity and leverage than its business could sustain," Bundschu wrote. Abbot's Passage stopped retail sales in July and closes for good in early October.

Gundlach Bundschu tried to sell before it filed. A wine and spirits investment bank brought back three letters of interest, Bundschu's declaration says, but the company's two lenders refused to approve a sale, a refinancing, or interest rate relief. Tiverton then asked Sonoma County Superior Court to appoint a receiver over the winery's debt. "The court granted the request without a hearing," Bundschu wrote. Chapter 11 followed.

A different winery, a different mechanism

Ninety miles north in Ripon, McManis Family Vineyards is failing for a reason that has nothing to do with a leveraged purchase. Canada made up 40 percent of the family winery's export sales before Canadian provinces boycotted American alcohol in response to President Trump's tariffs. That share has fallen to 5 percent, and case sales dropped by roughly 74,000 between July 2025 and July 2026, according to the Sacramento Bee. McManis is now selling 3,500 acres across ten vineyards, plus its Ripon winery facility, listed at $22.5 million on its own. "It was a very hard decision for myself and my family," said Ron McManis, the company's president and co-owner, in a written statement.

“It's really serious. Some companies had a third of their volume, some had over 50 percent of their volume that was going to Canada.”

Gundlach Bundschu and McManis are two failure modes inside the same downturn, not one. So are the cost cuts moving through the corporate side of the industry: Constellation Brands is laying off 212 workers at its Mission Bell winery in Madera as it shifts toward its beer business, and Gallo plans to cut more than 90 jobs and close a Napa Valley facility by January 2027. Neither company is near bankruptcy. Both are responding to the same shrinking demand curve that broke Gundlach Bundschu's margins, without carrying Gundlach Bundschu's debt.

How much of this is the industry, and how much is these companies

Gundlach Bundschu is not the only Sonoma or Napa winery in bankruptcy court this year. The Press Democrat also counts Robledo Family Winery in Sonoma Valley and Signorello Estate in Napa, which filed with up to $50 million in debt tied largely to fire recovery. That is three notable North Bay wine bankruptcies in roughly nine months, inside a state industry with thousands of wineries. It isn't evidence the business is collapsing broadly. It is evidence that legacy, debt leveraged, or export dependent operations are absorbing the downturn first.

Rob McMillan, founder of the wine division at Silicon Valley Bank, told the Press Democrat that sales are still falling but more slowly this year, and his bank forecasts an industry bottom sometime in 2027 or 2028, varying by region and price tier. He expects the volume of wine sold to keep declining through 2029 even as dollar revenue starts recovering sooner. "There are some signs in the data that confirm we are approaching a bottom. But we haven't arrived yet," McMillan said. That forecast, even if it holds, arrives too late to change what already happened to the Bundschu family's balance sheet.

Bundschu says the winery is not closing during the court process, and that a buyer, if one emerges, would inherit a business whose operating numbers already improved for three straight years. What a buyer would not inherit as easily is the six generations of family attached to the name. The Bundschus say they are hoping to stay involved in the winery regardless of who signs the next set of papers.