Who would have thought this would ever happen, but, Gibson guitars has filed for Chapter 11 bankruptcy protection. The company has announced it has up to $500 million of debt.
Gibson, who are based in Nashville, have announced to the press it’s restructuring plans that will include them winding down their consumer audio and home entertainment business, and will see them concentrating solely on musical instruments.
The new restructuring plans will see lenders getting equal ownership of a new company, instead of the way the company currently holds it stock. The company’s current CEO Henry Juszkiewicz, will remain in his position whilst the company changes control and personal.
The statement to the press reads as follows: “Gibson will emerge from Chapter 11 with working capital financing, materially less debt, and a leaner and stronger musical instruments-focused platform that will allow the company and all of its employees, vendors, customers and other critical stakeholders to succeed.”
Gibson CEO Juszkiewicz added: “Over the past 12 months, we have made substantial strides through an operational restructuring. We have sold non-core brands, increased earnings, and reduced working capital demands.
“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.
“Importantly, this process will be virtually invisible to customers, all of whom can continue to rely on Gibson to provide unparalleled products and customer service.”
In order for the move to take place, a federal judge will have to approve the plans, and if reports are correct, 69% of the company’s secured lenders support the move.