The Californian winery, DeLoach Vineyards, filed for bankruptcy on Tuesday. The company had amassed debts of some US$30m.
The Sonoma County winery was already on the receiving end of several lawsuits from growers seeking payment for grapes, while other creditors included Wells Fargo Business Credit, which is owed US$16m, and GE Capital which is owed US$2.2m.
The company’s owner, Cecil DeLoach, said he had been forced to file for bankruptcy to stave off creditors while the business is reorganised. Some analysts have predicted there could be further bankruptcies to come among struggling wineries.
“We are going to do what we have to do to dig our way out of the hole,” DeLoach said. “We know that Chapter 11 will not be a pleasant experience, but we plan to endure and still be in the wine business when we come out of this.”
The bankruptcy filing valued the company’s assets at $27m. The company is the fifteenth largest Sonoma winery with annual sales revenues of US$16m.
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