Gibson Brands Inc., makers of the iconic Gibson guitars, has filed for chapter 11 bankruptcy after news broke in February of their financial issues.
Reported by the Wall Street Journal and Bloomberg, Gibson is working to restructure the company due to owing nearly $500 million to various lenders. CEO Henry Juszkiewicz will remain on board for about a year as the company transitions control to its noteholders.
Gibson’s fiscal trouble stems largely from its expansion into audio and home entertainment equipment when it purchased Koninklijke Philips NV for $135 million back in 2014. In the restructuring of the company, the creditors have said they will “unburden” themselves of the consumer electronics part of Gibson Brands. Whether it’ll be sold or abandoned altogether has yet to be determined.
So, what about Gibson Guitars? The good news is Gibson will now focus more on its popular guitar brands
In a statement, Juszkiewicz said, “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.”
Fortunately, Les Paul and SG fans can breathe a sigh of relief from that news.
Erica Banas is a rock/classic rock blogger that loves the smell of old vinyl in the morning.