Gibson files for bankruptcy

[Rev Roy]

Originally Posted by jpd

With Ren at the helm the company thrived in the acoustic division.

Yep...and the quality is still running high in Bozeman. I bought a J-45 during the Ren era and just bought a new one this year, post-Ren. Both fantastic guitars...

[Mystery123]

Often times bankruptcy is a way to cheat and fraud creditors.
When companies do this just to take advantage of the system and hurt creditors, their name is never the same even if they come back.

Gibson, if/when it comes back, will not be the same.
It won't have the same respect as it had before.
In fact, it already lost it when it filed for bankruptcy.

[jasperguitar]

I think it was published a year ago

[sdelsolray]

I reviewed PACER (electronic filing records for US Federal Courts) about for the Gibson bankruptcy case. About a dozen different chapter 11 cases were filed today, all affiliates or subsidiaries. The main case is In re Gibson Brands, Inc., US Bankruptcy Court (Delaware) Case No.18-11025-CSS. So far, the filings in the case are standard chapter 11 first day motions, generally seeking authority to continue operations, pay employees, pay critical vendors, continue insurance and warranty programs, post petition financing, etc. There is also a motion to administratively consolidate the various separate chapter 11 cases entitled Motion for Joint Administration Filed by Baldwin Piano, Inc., Cakewalk, Inc., Consolidated Musical Instruments, LLC, Gibson Brands, Inc., Gibson Cafe & Gallery, LLC, Gibson Europe B.V., Gibson Holdings, Inc., Gibson Innovations USA, Inc., Gibson International Sales LLC, Gibson Pro Audio Corp., Neat Audio Acquisition Corp., Wurlitzer Corp.

Most of the bankruptcy paperwork required of Gibson (e.g., asset lists, creditors lists, statement of financial affairs) have not been filed yet.

[Steadfastly]

It's not so bad after all, they've simply gone out of tune.

Gibson guitar firm goes out of tune

3 hours ago

Gibson, whose electric guitars have been played by stars including Elvis Presley, Keith Richards and Jimmy Page, has filed for bankruptcy protection amid the weight of a $500m debt pile.

Lenders will take control of the Nashville-based company, which was founded in 1894.

It made an ill-fated acquisition of Philips' consumer audio division four years ago for $135m.

Gibson will wind down that business and plans to focus on musical instruments.

Chief executive Henry Juszkiewicz, who bought the company in 1986, said the Chapter 11 filing would assure the company's "long-term stability and financial health".

[Goat Mick]

Originally Posted by jpd

With Ren at the helm the company thrived in the acoustic division.

But Ren really hasn't been the same since he and Stimpy split up.

I think this restructuring will be a good thing and most likely it was the chief shareholders that decided Henry needed to go and this is the way of getting him out. My dad's J45 is the first guitar I ever heard and that was before I was born so Gibson guitars hold a special place in my heart. I'm hopefully optimistic that this is the turnaround they need.

[rct]

Originally Posted by sdelsolray

Most of the bankruptcy paperwork required of Gibson (e.g., asset lists, creditors lists, statement of financial affairs) have not been filed yet.

Form 204 List of Creditors who have the 30 largest unsecured claims and are not insiders

is filed. Think of a company that makes parts for guitars. Gibson owes them a lot.

rct

[Spyvito]

Originally Posted by jwguitar

At least they reached an agreement to continue on and restructure their debt. I would hate to see Gibson disappear completely. They are the only guitars that even the non-guitarist knows about.

Except for Fender

[Rmz76]

Originally Posted by Mystery123

Often times bankruptcy is a way to cheat and fraud creditors.
When companies do this just to take advantage of the system and hurt creditors, their name is never the same even if they come back.

Gibson, if/when it comes back, will not be the same.
It won't have the same respect as it had before.
In fact, it already lost it when it filed for bankruptcy.

I don't see it as cheating anyone. Bankruptcy laws exist to protect businesses and individuals and offer a reset in highly competitive often dirty game of Capitalism. Investors are aware of the bankruptcy laws and the possibility that companies they are loaning money to could go down this path. Consideration of the possibility and likelihood of bankruptcy is a calculated risk and as with any dice roll, sometimes you loose. The alternative would be investments and loan paybacks (with profits from interest) being a sure thing and by design that's just not the way our system is or possibly can be to survive and thrive as it does. As many articles on Gibson's Chapter 11 filing have mentioned, it's still possible debt holders can force them into liquidation. It's going to be a bumpy ride for Gibson to get through this and who knows what kind of impact this will have on their product line until it clears or into the future.

The only thing we can be sure of is that big changes are coming.

[brianmay]

So, are we looking to a Marson J-28 any time soon?

Or even a Gibtin D-45

[ataylor]

[rgregg48]

Henry Junk-O-wicz is out!

[Everton FC]

Originally Posted by greenshoe

In a previous life, I worked in corporate debt restructuring for a moment.

Things can go haywire during a Ch 11 but from the looks of it, Gibson should survive this.

It's not Ch 7 so that's a promising sign that the debt holders are hoping to keep the company alive (Ch 7 is selling off assets to pay back debt; Ch 11 is a restructuring of the debt itself).

Usually, debtholders are either forced to take a "haircut" (write off a % of the remaining debt outstanding) so the payment terms going forward are easier to handle for the company, or

Debtholders become quasi-shareholders - the debt can be "converted" into shares in the company under certain terms or thresholds.

Given that there's been rumors that debtholders want Henry out, my guess is the latter - they will be converting some if not eventually all of their debt into equity, becoming shareholders, and booting Henry.

Again, the guitar business isn't really the issue, but all the other crap they bought. In fact, their guitar business (both acoustic and electric, including Epiphone) seems to be doing really well for the most part.

As someone who "sort of" works in this line of work... It's the debt holders who may very well be in more trouble, ultimately, than Gibson.

[EverettWilliams]

Gibson jumped the shark long ago. The good news is that there are a ton of old Gibsons in the marketplace and they are, save for a few exceptions, generally a lot more affordable than their peers in the vintage market. I’ve got a lot of Gibsons, but they’re all from Kalamazoo. The Real Gibson’s been dead for decades.

[nitram]

Originally Posted by EverettWilliams

Gibson jumped the shark long ago. The good news is that there are a ton of old Gibsons in the marketplace and they are, save for a few exceptions, generally a lot more affordable than their peers in the vintage market. I’ve got a lot of Gibsons, but they’re all from Kalamazoo. The Real Gibson’s been dead for decades.

Nice to hear from you.