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      STATES </strong></font></div>
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      AND EXCHANGE COMMISSION </strong></font></div>
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      D.C. 20549 </strong></font></div>
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      8-K</strong></font></div>
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      REPORT </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      EXCHANGE ACT OF 1934 </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Date
      of report (Date of earliest event reported): March 22,
      2006</strong></font></div>
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      Holdings, Inc. </strong></font></div>
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                or other jurisdiction</strong></font></div>
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                incorporation)</strong></font></div>
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                Employer</strong></font></div>
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            <td align="left" valign="bottom" width="4%">&#160;</td>
            <td align="left" valign="middle" width="37%">&#160;</td>
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                Highway 116 North</strong></font></div>
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            </td>
            <td valign="top" width="37%">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below): </font></div>
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          <tr>
            <td align="left" valign="top" width="3%">
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                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12) </font></div>
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          <tr>
            <td align="left" valign="top" width="3%">
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                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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          <tr>
            <td align="left" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#168;</font></div>
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                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div id="GLFTR" style="WIDTH: 100%" align="left">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <hr style="COLOR: black" noshade size="2">
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 144pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Entry
      into a Material Definitive Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
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      of
      SonomaWest Holdings, Inc. (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Company</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      approved compensation arrangements for directors of the Company for service
      after that date as members of the Special Committee (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Special
      Committee</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      of the
      Board that the Board established following the previously announced </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">receipt
      by the Company of a letter from Mr. Walker Stapleton, the Company&#8217;s Chief
      Executive Officer and a director, disclosing the desire to initiate a
      management-led buyout of the Company by an investment group that would include
      members of his family. Members will receive an initial payment of $20,000 and,
      if the Special Committee is still in existence and undertaking activities with
      respect to the letter previously delivered by Mr. Stapleton (and related
      matters) as of May 3, 2006, then each member will receive an additional $15,000.
      Under the Company&#8217;s previously adopted policies concerning compensation to
      directors, directors are generally entitled to receive $1,000 for each meeting
      attended of a committee or subcommittee of the Board. In connection with the
      above arrangements, the Board determined that no further meeting fees would
      be
      payable in connection with meetings of the Special Committee. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      5.02</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Departure
      of Directors or Principal Officers; Election of Directors; Appointment of
      Principal Officers</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 144pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      22, 2006, the Board elected Joe Milam as a director of the Company, filling
      a
      vacancy on the Board. Mr. Milam was also appointed a member of the Special
      Committee of the Board. In connection with Mr. Milam&#8217;s appointment, Mr. David
      Bugatto, a director, resigned from the Special Committee.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
      Milam
      is a founding member and President of Legacy Capital Management in Roseville,
      California, an investment management firm. He has held various portfolio
      management positions at BIL Trainer Wortham, a division of the Bank in
      Liechtenstein; in 1993, he acquired the division and renamed it Legacy Capital
      Management. From 1985 to 1990 he held various positions at E.F. Hutton with
      responsibility for money management and portfolio management. He has extensive
      experience in the valuation of securities, including with the Credit Suisse
      HOLT
      framework for corporate valuation. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 144pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      8.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
      Events</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      23, 2006, the Special Committee received a letter from Walker Stapleton. The
      letter referenced his earlier February 7, 2006, letter to the Company
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">expressing
      an interest in initiating a management-led buyout transaction of the Company
      by
      an investment group including Mr. Stapleton and members of his family, including
      Craig Stapleton, who is the Company&#8217;s largest stockholder (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Investment
      Group</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      The
      February 7, 2006 letter proposed a price of $11.03 per share for all outstanding
      shares of the Company not owned by the Investment Group.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      March
      23, 2006 letter expressed continued interest in making an offer at the above
      price. The letter indicates that the exact structure of the transaction would
      depend on the ability of the Investment Group to reach an agreement with the
      Company, as well as tax and securities law considerations. The letter noted
      that
      the Investment Group, which beneficially owns approximately 48.5% of the
      outstanding common stock of the Company, does not have any interest in selling
      its shares in the Company and therefore would not, under any circumstances,
      support an alternative transaction. The letter noted that the Investment Group
      was prepared to move forward promptly to consummate the proposed transaction,
      had retained the services of counsel and was well along in discussions with
      financing sources. The letter suggested that the Special Committee retain the
      services of an investment banker to advise the Special Committee on matters
      related to the transaction within the next week. The letter indicated that
      the
      Investment Group was prepared to leave its proposal open until April 7, 2006,
      but reserved the right to amend or withdraw the proposal and terminate further
      discussions at any time prior to execution of definitive agreements, and that
      if
      the Investment Group was unable to consummate the transaction in a timely
      manner, it would explore other options.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
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      <div>&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      copy of
      the letter is attached hereto as an exhibit.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
      can
      be no assurance that any definitive offer will be made, that any agreement
      will
      be executed or that any transaction will be initiated or
      consummated.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      9.01 Financial Statements and Exhibits</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">
            </td>
            <td align="left" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>ExhibitList</u></font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Description
                of Exhibit</u></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">
            </td>
            <td align="left" style="width: 72pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
              99.1</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
                From Walker R. Stapleton to the Special Committee dated March 23,
                2006</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURE
      </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="middle" width="36%">&#160;</td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="middle" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="middle" width="37%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" colspan="3" valign="top" width="40%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SONOMAWEST
                HOLDINGS, INC.</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="middle" width="36%">&#160;</td>
            <td align="left" colspan="2" valign="middle" width="4%">&#160;</td>
            <td align="left" colspan="2" valign="middle" width="38%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
                March 24, 2006</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="right" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>/s/
                Walker R.
                Stapleton&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </u></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Walker
                R. Stapleton</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                Executive Officer</font></div>
            </td>
          </tr>

      </table>
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{"company-data": {"conformed-name": "SONOMAWEST HOLDINGS INC", "cik": "0000102588", "assigned-sic": "6519", "irs-number": "941069729", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-01912", "film-number": "06710087"}, "business-address": {"street1": "2064 HIGHWAY 116 NORTH", "city": "SEBASTOPOL", "state": "CA", "zip": "95472", "phone": "707-824-2534"}, "mail-address": {"street1": "2064 HIGHWAY 116 NORTH", "city": "SEBASTOPOL", "state": "CA", "zip": "95472"}, "former-company": {"former-conformed-name": "VACU DRY CO", "date-changed": "19920703"}}
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
PURSUANT
      TO SECTION 13 OR 15(d) OF THE
SECURITIES
      EXCHANGE ACT OF 1934
Date
      of report (Date of earliest event reported): March 22,
      2006
SonomaWest
      Holdings, Inc.
(Exact
      Name of Registrant as Specified in Charter)
Delaware
000-01912
94-1069729
(State
                or other jurisdiction
of
                incorporation)
(Commission
                File Number)
(IRS
                Employer
Identification
                No.)
2064
                Highway 116 North
Sebastopol,
                California
95472
(Address
                of Principal Executive Offices)
(Zip
                Code)
Registrant's
      telephone number, including area code: (707) 824-2534
Same
(Former
      name or Former Address, if Changed Since Last Report.)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below):
¨
Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)
¨
Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)
¨
Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))
¨
Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))
Item
      1.01
Entry
      into a Material Definitive Agreement
On
      March
      22, 2006, the Board of Directors ("
Board
")
      of
      SonomaWest Holdings, Inc. (the "
Company
")
      approved compensation arrangements for directors of the Company for service
      after that date as members of the Special Committee (the "
Special
      Committee
")
      of the
      Board that the Board established following the previously announced
receipt
      by the Company of a letter from Mr. Walker Stapleton, the Company's Chief
      Executive Officer and a director, disclosing the desire to initiate a
      management-led buyout of the Company by an investment group that would include
      members of his family. Members will receive an initial payment of $20,000 and,
      if the Special Committee is still in existence and undertaking activities with
      respect to the letter previously delivered by Mr. Stapleton (and related
      matters) as of May 3, 2006, then each member will receive an additional $15,000.
      Under the Company's previously adopted policies concerning compensation to
      directors, directors are generally entitled to receive $1,000 for each meeting
      attended of a committee or subcommittee of the Board. In connection with the
      above arrangements, the Board determined that no further meeting fees would
      be
      payable in connection with meetings of the Special Committee.
Item
      5.02
Departure
      of Directors or Principal Officers; Election of Directors; Appointment of
      Principal Officers
On
      March
      22, 2006, the Board elected Joe Milam as a director of the Company, filling
      a
      vacancy on the Board. Mr. Milam was also appointed a member of the Special
      Committee of the Board. In connection with Mr. Milam's appointment, Mr. David
      Bugatto, a director, resigned from the Special Committee.
Mr.
      Milam
      is a founding member and President of Legacy Capital Management in Roseville,
      California, an investment management firm. He has held various portfolio
      management positions at BIL Trainer Wortham, a division of the Bank in
      Liechtenstein; in 1993, he acquired the division and renamed it Legacy Capital
      Management. From 1985 to 1990 he held various positions at E.F. Hutton with
      responsibility for money management and portfolio management. He has extensive
      experience in the valuation of securities, including with the Credit Suisse
      HOLT
      framework for corporate valuation.
Item
      8.01
Other
      Events
On
      March
      23, 2006, the Special Committee received a letter from Walker Stapleton. The
      letter referenced his earlier February 7, 2006, letter to the Company
expressing
      an interest in initiating a management-led buyout transaction of the Company
      by
      an investment group including Mr. Stapleton and members of his family, including
      Craig Stapleton, who is the Company's largest stockholder (the "
Investment
      Group
").
      The
      February 7, 2006 letter proposed a price of $11.03 per share for all outstanding
      shares of the Company not owned by the Investment Group.
The
      March
      23, 2006 letter expressed continued interest in making an offer at the above
      price. The letter indicates that the exact structure of the transaction would
      depend on the ability of the Investment Group to reach an agreement with the
      Company, as well as tax and securities law considerations. The letter noted
      that
      the Investment Group, which beneficially owns approximately 48.5% of the
      outstanding common stock of the Company, does not have any interest in selling
      its shares in the Company and therefore would not, under any circumstances,
      support an alternative transaction. The letter noted that the Investment Group
      was prepared to move forward promptly to consummate the proposed transaction,
      had retained the services of counsel and was well along in discussions with
      financing sources. The letter suggested that the Special Committee retain the
      services of an investment banker to advise the Special Committee on matters
      related to the transaction within the next week. The letter indicated that
      the
      Investment Group was prepared to leave its proposal open until April 7, 2006,
      but reserved the right to amend or withdraw the proposal and terminate further
      discussions at any time prior to execution of definitive agreements, and that
      if
      the Investment Group was unable to consummate the transaction in a timely
      manner, it would explore other options.
A
      copy of
      the letter is attached hereto as an exhibit.
There
      can
      be no assurance that any definitive offer will be made, that any agreement
      will
      be executed or that any transaction will be initiated or
      consummated.
Item
      9.01 Financial Statements and Exhibits
ExhibitList
Description
                of Exhibit
Exhibit
              99.1
Letter
                From Walker R. Stapleton to the Special Committee dated March 23,
                2006
SIGNATURE
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.
SONOMAWEST
                HOLDINGS, INC.
Date:
                March 24, 2006
By:
/s/
                Walker R.
                Stapleton
Walker
                R. Stapleton
Chief
                Executive Officer