A Dauphin County winery and related businesses have filed for bankruptcy as they look for a buyer for their operations.
Spring Gate Winery parent company Schoffstall Farm LLC filed for Chapter 11 bankruptcy protection on May 14 after experiencing six-figure losses in 2021 and 2022, according to a petition before U.S. Bankruptcy Court for the Middle District of Pennsylvania.
Based in Lower Paxton Township, the business never fully recovered from the pandemic, according to its bankruptcy attorney, Robert Chernicoff of Harrisburg law firm Cunningham Chernicoff & Warshawsky.
The pandemic shut down foot traffic at wineries and other hospitality businesses.
What’s next: Spring Gate is continuing to operate and is seeking a buyer to acquire it as a going concern, Chernicoff said. it employs 35 people, according to court filings.
Lemoyne-based real estate firm NAI CIR is being brought on as the broker, Chernicoff added.
Any sale would require court approval.
The winery’s largest secured creditors include Mechanicsburg-based Horizon Farm Credit, which is owed $1.9 million; the U.S. Small Business Administration, owed $950,000; and Lancaster-based Fulton Bank, owed $700,000, according to court filings.
The background: Spring Gate was founded by Martin Schoffstall.
He originally purchased the winery’s land, a 60-acre farm property at 5790 Devonshire Road, in 1995, according to county records.
Schoffstall began planting grapes there in the early 2010s, according to the Spring Gate website.
The business now includes a brewery and spirits business, as well as a roster of events, including concerts and festivals.
In addition to the winery, Schoffstall has been an investor in startup companies over the years under the aegis of Schoffstall Ventures. The fund is no longer in business, according to Pitchbook.
