As Music Radar reports, Gibson Brands has filed for bankruptcy. Meanwhile, they came up with the plan to continue producing guitars while giving lenders equal ownership over the company, replacing stockholders, including their CEO Henry Juszkiewicz.
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Papers have been submitted on Tuesday, May 1 and they file for Chapter 11 bankruptcy protection. As the source further states, the documents explain that the company is $500 million in debt and the lenders agreed on a short-term loan of $135 million to fund the operations. The next step is restructuring as it will give all the lenders a share of the electronics division.
The company’s official statement reads:
“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.”
Henry Juszkiewicz, who will remain the CEO during this transitioning period, commented:
“Over the past 12 months, we have made substantial strides through an operational restructuring.
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“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.”