Next year, the winery Ray Signorello’s father founded when he was just 14 years old turns 50 — but it might not make it to its golden jubilee.
At 1:30 p.m. on Oct. 2, Napa’s Signorello Estate is set to be unceremoniously auctioned off in a small, concrete courtyard next to the Napa County Courthouse. Ray Signorello suspects the winning bidder will be the lender that he owes $37 million: American AgCredit, a borrower-owned cooperative that finances agriculture businesses.
Even in the wake of the wine crisis, which has led to a surge in closures and sales, winery foreclosures remain incredibly rare in California; wineries are more often auctioned off through distress sales via the bankruptcy process. In a foreclosure, which is typically initiated by a lender or creditor, a winery’s land, buildings, equipment and intellectual property are seized as collateral. In a bankruptcy, usually initiated by the winery, the court supervises a sale or liquidation. (Sometimes, there are alternative options, like debt reorganization.)
When the 2017 wildfires tore through Napa Valley, Signorello Estate was the first winery confirmed to have burned down. It took Ray Signorello, above, seven years to rebuild.
Jessica Christian/S.F. Chronicle
Four months ago, American AgCredit filed a notice of foreclosure, followed by a notice of sale for an auction to take place outside the Napa County courthouse. If the firm repossesses the winery (along with three other California wine brands he’s founded), Signorello, 63, will lose his family’s legacy, which he had hoped to pass on to his two daughters. In the likelihood that the lender then shuts the winery down while looking for a buyer, the wine from the grapes Signorello picked earlier this month, which is currently undergoing fermentation, will spoil, and his roughly 10 employees, including his vineyard foreman, who’s been with the winery since 1989, will lose their jobs.
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American AgCredit declined to comment on the specifics of its dealings with Signorello. “American AgCredit approaches every situation with care and a deep understanding of the realities of agriculture and rural business. At the same time, we have a responsibility to prudently manage risk on behalf of all our member-owners,” a company spokesperson said. “Foreclosure is never an outcome we pursue lightly and is only considered after other alternatives have been evaluated.”
Owner Ray Signorello initially took out a $10 million loan for rebuilding in 2018.
Jessica Christian/S.F. Chronicle
Ten years ago, Signorello thought his winery, set on a hilltop off Napa’s Silverado Trail, had endured the worst-case scenario when it burned to the ground in the 2017 Atlas Fire. Rebuilding took nearly seven years, and a series of unforeseen events — including permitting delays, the pandemic, tariffs and the wine crisis — have led him here. “I’ve done this for 38 years. It’s my livelihood, it’s my family’s livelihood,” Signorello said. “If (American AgCredit) owns it, this place will be ruined. All the people go away. All the good stuff that we do, the organic vineyards — it’ll just go to hell.”
One problem after another
Signorello Estate, seen above in flames, burned down during the Atlas Fire in October 2017.
Noah Berger/For the S.F. Chronicle
Signorello was the first winery confirmed to have burned down in the 2017 Atlas Fire, which began on Sunday, Oct. 8. The winery, hospitality space and Signorello’s home were destroyed but there was a silver lining: Ray Signorello’s 38-year-old Chardonnay vines, which he believes are the second-oldest in Napa Valley, and his 28-year-old Cabernet vines, had survived. He decided on an ambitious plan to rebuild and “felt good about it,” he said, “until it turned.”
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The permitting process with Napa County “dragged on,” and he wasn’t allowed to start construction until 2020. The pandemic hit, significantly impacting his restaurant wine business, which at the time, accounted for more than 50% of his sales. Construction on the winery also stalled, while his costs, especially for concrete and steel — the foundation of Signorello’s mission to make the winery fully fireproof — “went through the roof.” That also included building 4,000-square feet of waterproof caves into the hillside, digging a second well and putting thousands of feet of power lines underground.
Permitting significantly delayed construction on Signorello’s rebuild, which consisted of winery caves and a production facility with extensive fireproofing.
Santiago Mejia/S.F. Chronicle
“Every day, I’d get a call about how it’s going to take longer and cost more,” Signorello said, and he repeatedly had to go back to American AgCredit to increase the loan. Smoke from another round of Napa Valley wildfires destroyed his entire 2020 red grape crop, meaning that in a few years, he’d have no red wine — the bulk of his production — to sell from that vintage. There was also a long battle with his insurance company, which he said originally offered to pay him just $300 a foot for his losses. “You can’t build a shack for $300 (a foot),” he said. It cost him $1 million in legal fees to fight the company, and he “still only got 75% of what I should have.”
Signorello Estate reopened in June 2024, but had accumulated more than $30 million in debt throughout the nine-year rebuilding process.
Jessica Christian/S.F. Chronicle
In June 2024, nearly seven years after the fire, Signorello finally opened the doors to its fancy new winery. It featured state-of-the-art, automated equipment and doors Signorello can open from his cell phone. It cost “north of $30 million,” he said, double his original estimate — and he hadn’t even broken ground on the visitor center and home he had hoped to build later.
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The wine business changed a lot in those seven years, too. When Signorello obtained his original loan for about $10 million in 2018, wine sales were in a period of steady growth. They exploded in 2020, largely due to pandemic pantry loading. During those good years, while many of his neighbors were enjoying success, Signorello said his brand “went downhill” as he was relegated to hosting visitors in a modest trailer and his wine club numbers “slowly faded off.” Starting in 2023, global wine sales began to drop, and have continued their downward trend in the years since. “I opened my doors to a storm,” Signorello said.
Signorello also planned for custom crush — when a winery makes and stores wine for other small wine brands that don’t have their own facility — to be a big part of his business model at the new winery. Because of the wine industry downturn, he’s found that “there’s no, or very little, custom-crush business right now.” Canada’s U.S. alcohol ban, which went into effect in early 2025 in retaliation for President Trump’s tariffs, has been another big blow, since Canada accounted for 20% of Signorello’s sales. “Maybe you could get through one or two of those, but when you put them all together — I’m not a magician,” Signorello said. “I don’t think there’s anybody else that could have done much different.”
A tragic end
Signorello Estate is set to be auctioned off in a courtyard next to the Napa County courthouse on Oct. 2.
Jessica Christian/S.F. Chronicle
Since 2018, Signorello said the interest rate on his loan from American AgCredit has skyrocketed, from 4.75% to 12.6% in 2024, due to him being “out of compliance.” He admitted that he missed payments and said American Ag Credit, the county’s fifth-largest farm credit association, started pressuring him to repay it. “They probably didn’t like the loan,” he said. “They realized — bad market, big loan — this is a problem for us.”
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Signorello didn’t have $37 million, so he hired Canadian-based BMO Capital Markets, a mergers and acquisitions leader in U.S. wine, to help him find an investor or buyer. But after a year of searching, “they got nothing,” he said. “I couldn’t solve the problem.”
Mario Zepponi, a mergers and acquisitions wine expert and a managing director for BMO, declined to comment on Signorello, but said foreclosure “is not a common practice amongst lenders” in the wine industry, as lenders typically “want to work with the borrower to find a more elegant solution.” The current market, however, is “overly taxing of lenders’ patience, much more than what we’ve seen in any other downcycle,” which Zepponi suggested is due to the length of this downturn and the fact that it’s the first time lower consumption has played a role in one since the 1980s.
The Signorello wine library, along with the winery, land and intellectual property rights, could be repossessed by its lender next month.
Jessica Christian/S.F. Chronicle
After the notice of sale posted in July, Signorello said longtime customers of his winery offered American AgCredit $16 million, all cash — but the creditor turned it down. The night before the Aug. 28 auction was scheduled to take place, Signorello made one last effort to save the winery and filed for bankruptcy, which delayed the auction a month and would, he hoped, force a sale through a more traditional courthouse auction.
The filing included a stalking horse offer (a minimum bid) from his customers — revealed in the filing as Amar Doman and Ashley Cooper, Canadian business executives in the lumber and securities industries — of $20 million. (Signorello said the plan was for him to stay on in an operations role.) The filing also included a debtor-in-possession (DIP) financing agreement, which would allow Signorello to continue operating through the bankruptcy process. It would also mean that Doman and Cooper, who financed the filing, would get paid back before American AgCredit in the case of a sale.
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American AgCredit opposed the DIP financing agreement in court, and Signorello said he felt he had no choice but to withdraw the bankruptcy filing. The auction is back on, now scheduled for Oct. 2. “This process is a joke. It’s a courtroom step auction with cash, so (bidders) literally have to bring like 30 or 40 checks with them,” Signorello said. “Usually these things are quite small. They’re $100,000 deals. Wineries of this nature are not sold on corporate steps in front of a fountain.”
Signorello had also hoped to build a new visitor’s center and rebuild his home on the estate.
Jessica Christian/S.F. Chronicle
Signorello feels strongly that the winery is unlikely to receive a bid above $20 million, and he fears American AgCredit will take ownership through a credit bid that puts its owed debt toward the purchase price. The last time a bank took over a Napa Valley winery was in 1992, when Napa Valley Bank foreclosed on sparkling wine house Hanns Kornell; later that year, it sold the property, which became the home of Frank Family Vineyards.
Signorello said that he finds American AgCredit’s strategy perplexing. The quiet real estate market for California wine isn’t showing signs of rebounding any time soon, and it could be a while before the institution gets a better offer than the $20 million it rejected. In the meantime, American AgCredit will either have to tend the vines and operate the winery — which will likely require obtaining a new ABC license — or shut it down with the 2026 fermentations still underway. That could further denigrate the winery’s value for a future sale.
Signorello is holding out hope that American AgCredit will have a change of heart and accept his customers’ offer, but worries that the institution’s motive for holding firm may be to make a statement to its other clients struggling through the wine industry downturn. “Maybe it’s better for them to sell it next to the courtroom steps,” he said, “because that gives them a way to talk to the rest of the world and say, ‘We didn’t make a deal. We just auctioned it off. Do you want to be auctioned off too?’”
Dining and Cooking