The 168-Year-Old Winery That Debt Finally Killed
Published September 30, 2026
Gundlach Bundschu — founded in 1858, California's oldest continuously family-owned winery — filed for Chapter 11 on Sept. 23, 2026, citing more than $37 million in debt. A debt-financed expansion weeks before the pandemic, plus a brutal industry-wide slump in wine sales, undid six generations of family ownership. The winery and tasting room remain open while the company restructures and seeks a new investor.
On Wednesday, September 23, 2026, one of the oldest names in American wine walked into bankruptcy court. Gundlach Bundschu, the Sonoma Valley winery founded in 1858 and the oldest continuously family-owned winery in California, filed for Chapter 11 protection from its creditors, citing more than $37 million in debt. Six generations of the Bundschu family had kept the business independent through earthquakes, Prohibition, wildfires, recessions and a pandemic. The thing that finally broke it was a loan.
The timeline of the fall is painfully precise. In February 2020, the family took on debt to acquire a 60-acre winery and vineyard in Glen Ellen — the former Valley of the Moon Winery property — to serve as the new home of Abbot's Passage, a wine brand founded in 2016 by Katie Bundschu. The family hoped a second winery and hospitality venue would create a stronger platform and grow the business. Within weeks, the COVID-19 pandemic shut down winery visits and the hospitality business they had just bought. The wine industry's subsequent downturn — declining demand, excess inventory, distributor consolidation — left the company overleveraged with no easy way back.
The numbers tell the rest. Bankruptcy documents show the winery's parent company carrying about $35.5 million in secured debt. Its largest creditors include Tiverton Advisors, with an $18 million claim the winery disputes and lists at $9.4 million, and American AgCredit, owed roughly $8.8 million. Facing a weak wine market and mounting debt, the company cut costs by more than 40 percent — about $6 million — over three years, and several rounds of layoffs in the last 18 months shrank the workforce from 102 employees to 63. Even that wasn't enough.
What happened to Gundlach Bundschu happened to much of the American wine business at once. U.S. wine sales fell below 300 million cases in 2025 — a 20-year low, down from 344 million just five years earlier — and industry revenue dropped $1.2 billion in a single year to $74.3 billion. Younger drinkers are reaching for canned cocktails, hard seltzers and alcohol-free alternatives; more people are drinking less for health reasons; and the shrinking population of older wine drinkers has left wineries fighting harder for every customer. Jeff Bundschu told CBS News Bay Area that the industry had lived for years in a world of an increasing pie, and 'now that pie is not going to be increasing, we're going to have to work harder for the same customers, and work harder to attract new ones.'
None of that makes the family behind it a cautionary punchline, and the record doesn't treat them as one. 'For six generations, our family believed that Gundlach Bundschu is more than a winery. It is a core part of Sonoma Valley,' Jeff Bundschu said. In his court declaration he wrote that the filing was unprecedented for the family and the company, adding, 'We enter this process with great humility and remorse for the burden the company's financial distress places on our employees, vendors, lenders, customers, and community.' The family poured substantial personal assets into keeping the operation afloat — including pledging and selling real estate outside the winery — and its historic home, rebuilt after the 2017 Tubbs Fire destroyed it, is now at risk to lenders.
Chapter 11 is not an ending here, at least not by design. The winery and its tasting room on the historic 320-acre Sonoma estate remain open while the court-supervised restructuring plays out, and the company is negotiating with a potential new investor to supply the capital it needs. The expected result is a different ownership structure — the end of the family's majority control after six generations — with the goal of keeping 'GunBun' operating and rooted in Sonoma Valley.
The lesson the family would probably choose is the one Jeff Bundschu stated in the company's press release: that this was never only about a winery, but about a place, a legacy and a community worth preserving. The lesson the numbers teach is simpler, and useful far beyond Sonoma. The debt the Bundschus took on was sized for the boom they were expanding into; it was the pandemic, the industry slump, and the worst case they got. Borrowed money doesn't care what your projections said. It only cares whether you can carry it through the years you never planned for.
The lesson: Debt sized for the boom can outlast it — borrow only what you can carry through the years you never planned for.
Source: original reporting · How we source stories