Gibson bankruptcy: Guitar maker to leave Chapter 11 by October

16 Sep 2018 by Jef | Approximate reading time: 2 Minutes

Gibson Les Paul Chapter 11 Bankruptcy · Source: Gibson

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The sad tale of Gibson’s financial woes has been the leading story in the guitar industry this year. After the famed guitar maker entered bankruptcy in April, trade press and financial news outlets are now reporting that Gibson looks likely to exit bankruptcy in a matter of weeks.

Chapter 11 no more?

According to articles on MSRetailer and the Wall Street Journal, all the major stakeholders in the company’s Chapter 11 deal have reached a settlement that will see Gibson leave Chapter 11 in October this year. Criticism had been growing from some quarters about the previous version of the settlement plan. A new deadline for voting has been announced,

So what will be the future role at Gibson for current owner and CEO Henry Juskiewicz? It was never likely that he would retain his position. Now it seems almost certain that he will be stepping down to assume a consultant role for the company. The day-to-day running of the of the company falls to Brian Fox of Alvarez and Marsal, effective from 6 September, as Chief Restructuring Officer until the CEO position is filled permanently.

Good news?

So it’s all good news, right? According to the WSJ article, the new owners of the company are “led by funds managed by KKR & Co.” Read: suits. Also, the new settlement plan effectively ends the search for a new buyer. From a musician’s point of view, it seems a shame that there isn’t going to be a new owner from within the industry. It would have been great to see Gibson run by people who know and understand musicians. Hopefully the new CEO will have a music industry background.

Oh, and as a kicker, here’s Henry Juskiewicz’s official comment:

I have been honoured to lead such a dynamic company in an industry near and dear to my heart. I am excited about a great future for Gibson and its loyal employees, customers and partners.

More Information

Court documents detailing the agreement
Gibson website
More Gibson coverage on gearnews.com

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7 responses to “Gibson bankruptcy: Guitar maker to leave Chapter 11 by October”

William Paxson says:

17 September 2018 at 12:17

Actually, giving ownership of Gibson to the bondholders only delays the eventual sale of Gibson. The bondholders are essentially bankers who loaned Gibson/Henry money and pushed Gibson/Henry into Chapter 11 because they saw it as the only avenue to recover their money. The plausible outcome of all of this is that the new “owners” will try to get Gibson stable/profitable/marketable and then flip it as they really don’t want to own a guitar company but want their money back (hopefully with a little “vig” on the top for their trouble eh?). After Chapter 11, the real fun is just starting.

Wzen says:

17 September 2018 at 14:28

Obama and the Left wing diaspora attacked and killed Gibson

William Paxson says:

17 September 2018 at 20:19

Read the financial reports-Henry did it all by himself with his stupid “life style” diversification and acquisition strategy for Gibson. Even if Henry and his cronies hadn’t been caught with their hands in the illegal smuggled wood cookie-jar, Gibson would still be in the same mess. Trying to buy your way into a low margin business (consumer electronics) that you know absolutely nothing about with expensive borrowed money is a recipe for disaster (as Henry and his partner found out).

Brian Rands says:

2 November 2020 at 15:46

Get real, read

B. Singer says:

11 October 2018 at 01:02

Too bad. Gibson has generated good guitar products for decades. People still want to play guitars so the demand will be filled by another company that isn’t so mismanaged.