Guitar maker Gibson files for Chapter 11 bankruptcy

Alicia Cross
May 2, 2018

In recent years, Gibson faced tighter credit terms from its suppliers and growing pressure from new import regulations on rosewood, a crucial material for the company's high-end instruments, according to S&P Global Ratings. The company remains hopeful that they can re-emerge from bankruptcy intact, but with reported debts of between $100 million and $500 million on the books owed to numerous different creditors, it remains to be seen whether they will be able to pull it off.

The company's Memphis plant is moving from its current location. According to court filings, current noteholders include Silver Point Capital, Melody Capital Partners and funds affiliated with KKR Credit Advisors.

Legendary jazz guitar player Charlie Christian made history playing a Gibson ES-150 - one of the first ever electric guitars - through an amplifier with the Benny Goodman orchestra. Some feel it's a result of a shift in the music zeitgeist away from guitar-driven music and toward more digitally-produced styles like EDM and hip-hop. It also manufacturers other musical equipment, including amps, turntables and more. Gibson plans to wind down its Gibson's Innovations business, which is largely outside of the U.S.

Gibson guitars have been esteemed by generations of guitar legends. The company ran out of time for a turnaround as a bond maturity and springing term loan loomed in July.

WhatsApp boss and co-founder to quit
In many a platform he repeated and reasserted that the messaging app would remain privacy-focussed and ad-less. Yet despite all this, WhatsApp is the most popular messaging app on the planet with over 1.5 billion users.

Vikings Re-Sign Terence Newman
Picking up the option gives the Vikings a window of nearly two years to sign Waynes to an extension before he can hit free agency. Waynes had a takeaway in Minnesota's 2015 Wild-Card playoff game and has had crucial interceptions in wins over Green Bay at U.S.

U.S. warns migrant 'caravan' against trying to enter
What will happen if they try to cross the border? 'Now that I'm here, I'm afraid to cross the border, ' she said. Donald Trump is firm on his stand that illegal migrants from Mexico are not welcome in the United States .

In response to our earlier report pointing to imminent bankruptcy, Gibson CEO Henry Juszkiewicz insisted that loan obligations were being met.

The maker of the storied Gibson Les Paul guitar, which has been in business since 1894, said it expects to keep operating while it reorganizes around its core businesses. Bloomberg notes that a news release from the company reveals plans to liquidate the division entirely. " The decision to re-focus on our core business, Musical Instruments, combined with the significant support from our noteholders, we believe will assure the company's long-term stability and financial health". Court papers call for a one-year consulting deal and compensation package for Juszkiewicz.

The company has already sold off some noncore brands, acquisitions that contributed to its burdensome debt load.

Other reports by Free-Prsite

Discuss This Article