New Delhi, Sept. 24 -- California's wine industry is confronting a deepening financial crisis, with two long-established, family-owned wineries facing severe financial distress amid falling demand, mounting debt and tougher lending conditions, according to the San Francisco Chronicle.

Napa Valley's Signorello Estate is reportedly facing foreclosure and is scheduled to be auctioned on October 2, while Gundlach Bundschu has filed for bankruptcy. The developments underscore the pressure facing producers that took on significant debt when the wine market was expanding.

According to the San Francisco Chronicle, both wineries took on tens of millions of dollars in debt at a time when California wine sales and property values were growing.

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