The Adelaida winery dispute highlights why related-party transactions, corporate governance, and ownership agreements matter for business continuity.
An ownership dispute with consequences for the business
Adelaida Cellars, Inc., also known as Adelaida Vineyards & Winery in Paso Robles, filed for Chapter 11 bankruptcy on December 13, 2024. The public bankruptcy docket listing identifies the proceeding as Case No. 9:24-bk-11409-RC in the Central District of California. 1
On October 14, 2026, the San Francisco Chronicle reported that family litigation had placed the winery’s future in question, with an October 15 buyer deadline under its bankruptcy plan. It also described a proposed $30 million settlement involving interests in related family companies, subject to court approval. That figure was not a winery sale price. The report said Kedrin Van Steenwyk would retain her equity in KMBG and Adelaida, and the winery remained operational. 2
Family ownership does not replace corporate governance
For corporations governed by California’s General Corporation Law, Corporations Code section 309(a) requires directors to act in good faith, in what they believe to be the best interests of the corporation and its shareholders, and with appropriate care, including reasonable inquiry. 3
Owners considering transactions among affiliated businesses should therefore examine each entity’s interests separately. Questions include who owns the assets, who benefits from the transaction, and what information supports the decision.
These are general governance considerations—not conclusions about which law governed the Adelaida transactions or whether particular parties satisfied their duties.
Related-party transactions require careful review
A transaction involving a director’s financial interest is not automatically invalid. Corporations Code section 310(a) provides alternative conditions under which specified interested-director transactions are not void or voidable merely because of the identified conflict. Depending on the applicable route, disclosure, approval procedures, and whether the transaction was just and reasonable to the corporation can matter. 4
Businesses should document the conflict, the transaction’s terms, the decision-making process, and the reasons for proceeding. Family agreement alone should not substitute for reviewing the applicable corporate requirements.
Resolving ownership and preserving operations are separate goals
A transfer of ownership interests and a sale of company assets involve different questions. Before negotiating either, identify the entity involved, the rights being transferred, the necessary approvals, and the obligations that remain.
Business owners should also discuss:
- Who can approve transactions involving owners or affiliated companies?
- How will a deadlock or proposed exit be addressed?
- How will an ownership interest be valued and a buyout funded?
- What arrangements will support payroll, customer obligations, and ongoing operations during a dispute?
These are planning questions, not guarantees that an agreement will prevent litigation or preserve the business. The governing documents, entity type, applicable law, and financial circumstances require individual review.
Related firm services are described on the Small Business & Commercial Litigation practice page.
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Mahrouyan Law handles these matters directly. Read more about how the firm approaches small business & commercial litigation in California, or discuss your own situation with the firm.
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Omeed Mahrouyan is the founder of Mahrouyan Law, P.C., a California firm handling business and commercial litigation, property and cargo damage claims, personal injury, landlord representation, startup transactions, and practical intellectual property matters. Clients work directly with him on strategy, drafting, and case decisions.
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