The second-oldest winery in Sonoma County and one of the oldest continually operating wineries in the state, Gundlach Bundschu, founded in 1858, has filed for bankruptcy, three months after its sibling property Abbott's Passage closed its doors.
The crisis is real in the wine industry, and one of the most established and long-lived wine businesses in Wine Country is under serious financial strain. As they announced in a release Wednesday, Gundlach Bundschu — or Gun Bun, to locals — has filed for Chapter 11 bankruptcy. Jeff and Katie Bundschu, the sixth-generation sibling owners of the winery, say that the winery and tasting room will remain open throughout the restructuring process, and they encourage fans to keep visiting, and to attend one of their signature live-music events, Soundcheck, on Sunday, October 4.
"Please come here during this process," says Jeff Bundschu, in a statement. "We plan to be open throughout, continue the special events we have already scheduled, and our team will be here sharing the wines we crafted with love, attention, lots of smiles — and really good music."
The release explains that the winery became over-leveraged following a debt-financed acquisition in February 2020. That acquisition was of the winery that became Abbott's Passage, a second property near Glen Ellen, which began as a second label started by Katie Bundschu with a small tasting room in the town of Sonoma. As part of a pre-pandemic growth strategy for the company, the new property offered expansive grounds with reserve-able bocce courts, and approachable, mid-priced wines.
In June, Bundschu announced the closing of Abbott's Passage, telling the Chronicle that, with the industry-wide decline in demand for wine, "It became increasingly challenging for the brand and hospitality experience to build the momentum we had envisioned."
Now, as the Chronicle reports, this has led to debts in excess of $37 million, and the Bundschu family is hoping to be able to partner with a new investor as part of the Chapter 11 process, and preserve a business that has the oldest continually family-owned winery in the state, dating back to 1858. Only Buena Vista Winery, founded one year earlier, is older among Sonoma County wineries.
Per the release, the family was offered millions from lenders at an increasingly "onerous" rate of interest, which led them to the decision to file for bankruptcy. Liquidating real estate assets, including a historic family home at the winery, where Jeff and Katie's parents have lived — which was rebuilt after being destroyed in the 2017 Nuns Fire — may be part of the process, they say.
"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," Jeff Bundschu said in a statement. "We are excited to partner with a family organization that recognizes the importance and value of our family operation to Sonoma Valley."
That last statement suggests that another winery family has already been lined up as a potential new investor, but that is not clear and the investor has not been named.
"Our family has been entrusted with this land for six generations," Bundschu says. "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."
The Chronicle notes that Gundlach Bundschu has had several rounds of layoffs in an effort to reduce expenses, going from 102 employees 18 months ago to 63.
In the bankruptcy filing, per the Chronicle, Bundschu writes, "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."
He adds, "This has never been only about a winery. It is about a place, a legacy and a community worth preserving."
Join the conversation
Comments
Comments load automatically as this section approaches.