Gundlach Bundschu Winery, one of California’s oldest wine producers, has filed for Chapter 11 bankruptcy protection with about $39 million in debt. The sixth-generation family business, founded in 1858, will remain open while it restructures and seeks an outside investor, potentially ending the Bundschu family’s majority ownership.

The financial crisis followed a 2020 expansion into a 60-acre estate for the Abbot’s Passage brand, completed just before the Covid-19 pandemic severely damaged tasting-room and hospitality revenues. The winery produces about 42,000 cases annually, but declining wine consumption, reduced tourism, high-interest loans and repeated layoffs have worsened its position; its workforce fell from 102 to 63, while debts include roughly $20 million at 14.75% interest and $17 million to another lender.