July 24 (Reuters) - Vintage Wine Estates ( VWE ), one of

the largest U.S. wine producers, filed for Chapter 11 bankruptcy

on Wednesday, citing overexpansion, too much debt and a surplus

of grapes as wine drinkers emerging from pandemic lockdowns

drank less.

The Santa Rosa, California-based company, whose more than 30

brands include B.R. Cohn, Clos Pegase, Firesteed, Kunde and

Layer Cake, as well as Ace Cider, will seek a Delaware

bankruptcy judge's permission to sell substantially all its

assets.

Chief Executive Seth Kaufman said reorganizing became

necessary after out-of-court efforts to sell some assets and

focus on "super premium" brands fell through.

Vintage's wines typically sell for $10 to $140 per bottle.

The company sold real estate and equipment belonging to

Cosentino Winery for $10.5 million last week.

"An unanticipated steep decrease in demand, surplus supply,

labor shortages and supply-chain disruptions, combined with a

spate of unanticipated integration costs and delays associated

with business acquisitions, have created an operating

environment in which the company is unable to continue outside

of chapter 11," Kaufman said in a court filing.

Vintage is among many businesses, including several retail

chains, that have struggled to adapt to changing buying habits

as the pandemic's depths receded.

The more than 11,600 U.S. wineries sold 377 million cases in

2023, down from 445 million in 2021, BMO Financial Group

estimated in May. California grape growers have burned or torn

out thousands of acres of vineyards to address the oversupply.

Vintage had about $475 million of assets and $400 million of

debts as of March 31. It is seeking $60.5 million of financing

to keep operating while it reorganizes.

The company's stock was down 40% at 6.7 cents in afternoon

trading, and will be delisted.

Vintage traded above $13 per share soon after going public

in June 2021 through a special purpose acquisition vehicle.

Its advisers include GLC Advisors, Riveron Consulting and

the law firm Jones Day.

The case is In re Meier's Wine Cellers Acquisition LLC et

al, U.S. Bankruptcy Court, District of Delaware, No.

24-bk-11575.