Gibson Bankruptcy Update

[Five Fourths]

Originally Posted by Truckjohn

Remember that Ch.11 bankruptcy is something a COMPANY files to protect itself from creditors. It’s the one where the judge wipes nearly all the debt clean and leaves the company strong and ready to run in the hands of the current owners.

As such - that means it was never in danger of being sold off....

If Henry is out - it’s because The Board wants him out due to investor relations.

I think what you may be seeing is more a PR campaign aimed at “Things at Gibson have changed and are different now... We are focusing on our customers and quality products rather than failed gimmicry”.

Yes. Henry is out because he was a (the) manager, not because of his ownership.

I suspect the reference to being "sold off" is based on the idea that some other company would come along and offer to buy Gibson (at a discount) in exchange for taking over the debt. One of the reasons shareholders might agree to this (besides the resolution of the current situation) is because Gibson under the same ownership might find it hard to borrow going forward. Being owned by Yamaha, for example, solves that problem to some extent. The new management of Gibson has to convince creditors they have a viable business either way, obviously.

The other part of this story that "sold off" applies to is the question of whether Henry's peripheral projects, such as the A/V business, are being separated from the core guitar business--sold to pay the debt, perhaps.

FF

[fishstick_kitty]

According to the WSJ article, the new owners of the company are “led by funds managed by KKR & Co.”

Sounds AWESOME!!!

[Maryc-k]

Gibson is not a public company, so there would be no Board. The equity group is going to groom the company for a sale. That’s their goal. Invest their money, build the company back up and sell it making a profit for their investors.

[Jengstrom]

Originally Posted by Maryc-k

Gibson is not a public company, so there would be no Board. The equity group is going to groom the company for a sale. That’s their goal. Invest their money, build the company back up and sell it making a profit for their investors.

This is my bet, too. The investors couldn't care less about the product. They only want to make a profit.

The company I work for went through Chapter 11 and ever since it emerged from bankruptcy, the bankers that own it have been selling it off, division by division. The division I work in wouldn't sell, so they spun it off into its own publicly traded company. One way or another, they will get their money back, and making guitars won't be any priority for them. All we can hope for is that whoever winds up owning it does care. It's possible.

Sorry to be such a downer.

John

[EMLPicks]

Originally Posted by Mr. Jelly

It can mean almost anything. Often it's a money/pride pay off so that they don't cause problems. They may have to ask him where the bodies are buried.

This appears to be the most likely scenario here. I personally hope the robot tuners go with him

- Eric

[Blackmore Fan]

I'm sure discussions of high finance in a guitar forum are just as informative as the mahogany versus rosewood discussions that break out in financial forums.

[Rev Roy]

Originally Posted by Blackmore Fan

I'm sure discussions of high finance in a guitar forum are just as informative as the mahogany versus rosewood discussions that break out in financial forums.

[patrickgm60]

Originally Posted by Maryc-k

Gibson is not a public company, so there would be no Board. The equity group is going to groom the company for a sale. That’s their goal. Invest their money, build the company back up and sell it making a profit for their investors.

Virtually all large corporations, private or public, have a board of directors. Whether the existing board remains intact and whether it has any authority are different questions (both answers are likely "No.")

I do wish them well and hope to see their products continue, for a very long time.

[McCawber]

In my industry we say " He's left to pursue other interests......"

And in my former industry we had a slightly different euphemism . . . .

"He was made available to the competition."

[vindibona1]

I think it's good that it's been taken over by new owners. Henry pretty much crashed the company. It's a wonder Gibson survived him.

[Rjlipton]

From "Digital Music News"
https://www.digitalmusicnews.com/201...ruptcy-ending/
Henry Juszkiewicz, the ousted CEO and a previous owner, would assume a seriously reduced role in the restructured entity.

Specifically, Juszkiewicz would embark on a permanent leave and lose most of his equity in the company.

Accordingly, Gibson would “delegate all responsibility and functions as chief executive officer” to a brand-new Chief Restructuring Officer, Brian Fox, who actually works for turnaround specialist Alvarez & Marsal. Gibson, under newly-restructured management, would also hire other outside consultants to complement Fox’s role

Additionally, Juszkiewicz would realize a sharply-reduced gain from the expected sale of Japanese electronics division TEAC. Previously, Juszkiewicz was in line to receive approximately $1.5 million from the expected sale price of $50 million. Under the new plan, Juszkiewicz would receive approximately $650,000.

There’s another key player here: David Berryman, who was also one of the principal pre-bankruptcy owners. In the new plan, Berryman and Juszkiewicz would collectively own less than 3.5% of the company. Juszkiewicz, in turn, would have no role in the company unless the company specifically called upon him.

[C-ville Brent]

Originally Posted by Blackmore Fan

I'm sure discussions of high finance in a guitar forum are just as informative as the mahogany versus rosewood discussions that break out in financial forums.

I actually have a bachelor's degree in finance. No offense taken of course but we are a diverse group. Thank you all for the updates. I have a couple G LPs and several Epi acoustics and an electric. Toured the Memphis factory a couple years ago. I was hoping to buy a J-45 sometime during this next year so am glad they might still be available. Gibson made it through the Norlin years and as bad as Henry Juszkiewicz's leadership may have been, they have survived. For me the robot tuners being standard on about every LP a few years ago was aggravating. How do you put something like that on a "Traditional"?

[TBman]

Originally Posted by Blackmore Fan

I'm sure discussions of high finance in a guitar forum are just as informative as the mahogany versus rosewood discussions that break out in financial forums.

You mean this place? Ten best readings.....

This is where most financial advisors get their info from my experience,

[fishstick_kitty]

Originally Posted by Blackmore Fan

I'm sure discussions of high finance in a guitar forum are just as informative as the mahogany versus rosewood discussions that break out in financial forums.

I've met a few accountants who play guitar...but I've never met a musician who does accounting as a hobby .

[Jaden]

My guess is that Henry J. and his partners diversified their portfolio into other ventures to be able to continue to produce guitars in the US which is of itself not very profitable, especially with the wearing thin market of the Les Paul. Companies to survive must grow at a certain rate or else stagnate and shareholders withdraw support. I understand his style of management became dictatorial and many workers were hurt. I think now is a good time to buy Gibson, and I’m not too optimistic about the future of this company.