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Old 05-01-2018, 07:07 AM
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Default Gibson files for bankruptcy

https://www.wsj.com/articles/guitar-...tcy-1525177170

By Austen Hufford
Updated May 1, 2018 8:26 a.m. ET
4 COMMENTS
Storied guitar maker Gibson Brands Inc. filed for bankruptcy protection Tuesday as the company has struggled with its debt load after a series of acquisitions.

The company, which filed for chapter 11 in U.S. Bankruptcy Court in Delaware, said it will continue to operate during the proceedings as it focuses on reorganizing around its core businesses. Gibson plans to wind down its Gibson’s Innovations business, which is largely outside of the U.S.

“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,” Chief Executive Henry Juszkiewicz said in prepared remarks. “Importantly, this process will be virtually invisible to customers.”

The Nashville-based maker of Gibson Les Paul guitars has been struggling with debt it took on to finance acquisitions of home-entertainment and audio-equipment makers years ago. Among businesses the company has added are some of Royal Phillips’s home-entertainment systems, TEAC and Onkyo stereos.

Gibson also makes instruments under a number of brand names including Dobro, Epiphone, Kramer and Tobias. The company also owns a number of historic brands, including Slingerland drums and Wurlitzer pianos.

Gibson said it has reached an agreement with holders of more than 69% of its senior secured notes due in 2018 and shareholders that lets it continue to operate. The company also said existing noteholders have committed to provide $135 million in debtor-in-possession financing.

The company said in the bankruptcy filing that it has debts of between $100 million and $500 million, including owing at least $100,000 to 26 other companies, including many suppliers.

Write to Austen Hufford at [email protected]
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Old 05-01-2018, 07:12 AM
twg1996 twg1996 is offline
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Quote:
Originally Posted by M19 View Post
https://www.wsj.com/articles/guitar-...tcy-1525177170

By Austen Hufford
Updated May 1, 2018 8:26 a.m. ET
4 COMMENTS
Storied guitar maker Gibson Brands Inc. filed for bankruptcy protection Tuesday as the company has struggled with its debt load after a series of acquisitions.

The company, which filed for chapter 11 in U.S. Bankruptcy Court in Delaware, said it will continue to operate during the proceedings as it focuses on reorganizing around its core businesses. Gibson plans to wind down its Gibson’s Innovations business, which is largely outside of the U.S.

“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,” Chief Executive Henry Juszkiewicz said in prepared remarks. “Importantly, this process will be virtually invisible to customers.”

The Nashville-based maker of Gibson Les Paul guitars has been struggling with debt it took on to finance acquisitions of home-entertainment and audio-equipment makers years ago. Among businesses the company has added are some of Royal Phillips’s home-entertainment systems, TEAC and Onkyo stereos.

Gibson also makes instruments under a number of brand names including Dobro, Epiphone, Kramer and Tobias. The company also owns a number of historic brands, including Slingerland drums and Wurlitzer pianos.

Gibson said it has reached an agreement with holders of more than 69% of its senior secured notes due in 2018 and shareholders that lets it continue to operate. The company also said existing noteholders have committed to provide $135 million in debtor-in-possession financing.

The company said in the bankruptcy filing that it has debts of between $100 million and $500 million, including owing at least $100,000 to 26 other companies, including many suppliers.

Write to Austen Hufford at [email protected]
Oh man... I hope they recover. I like their acoustics.
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Old 05-01-2018, 07:12 AM
Athens Athens is offline
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Default WSJ article

It wants me to register to read the article. Is what you posted the rest of the article?

This is a good thing. Reorganization and a bit of good business practice are exactly what Gibson needs.
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Old 05-01-2018, 07:17 AM
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For a large corporation filing bankruptcy is a way to restructure debt, lower interest rates and ultimately come out much leaner more profitable. It's not a devastating move like it would be for an average Joe like me. With some of the bad business decisions that Gibson has made this is likely the best way for them to refocus and begin to thrive again.
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Old 05-01-2018, 08:06 AM
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I heard whispers of this around the forum and other places earlier this year. Looks like they were right.

Hopefully this is a way for them to survive, and not the way they go out.
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Old 05-01-2018, 08:12 AM
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Quote:
Originally Posted by Athens View Post
It wants me to register to read the article. Is what you posted the rest of the article?

This is a good thing. Reorganization and a bit of good business practice are exactly what Gibson needs.
try this link.

https://www.bloomberg.com/news/artic...uitar-business

Also note that (IF) this filing can be accomplished it could turn out to be "a good thing" l, BUT right now it is not a done deal.

(from a USA Today article)

A federal judge will be required to sign off on the company's plan to shed debt, which has the support of 69% of secured lenders on notes due in 2018.

Unsecured creditors, such as other lenders and vendors, could object to the restructuring plan and demand liquidation on the grounds that they'd be better off with the company going out of business.



This just the petition filing first step , So it is still wait and see and hope
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Old 05-01-2018, 08:12 AM
PorkPieGuy PorkPieGuy is offline
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Gibson's brand is so widespread and (mostly) respected, another company will probably snatch them up...I'd say within a few weeks (if not sooner).
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Old 05-01-2018, 08:29 AM
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Originally Posted by PorkPieGuy View Post
Gibson's brand is so widespread and (mostly) respected, another company will probably snatch them up...I'd say within a few weeks (if not sooner).
I've heard this too. I've also read that some Chinese companies were chomping at the bit to buy Gibson but they wanted to wait until the bitter end.

I really hope this isn't the case and I hope that the CEO is canned.

He has absolutely run that great company into the ground. One of the reason I moved to buy a Gibson or two was because of the impending financial situation they were facing.

Will a ton change with the company as far as acoustics go? I certainly hope not but it's why I grabbed a few before.

I just feel awful for all the great working men and women who probably work under a ton of stress knowing their company might "go under."
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Old 05-01-2018, 08:38 AM
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I have no interest in buying a Gibson. The company’s poor record on treating their employees sealed Gibson’s fate for me years ago. I hope beyond shedding debt they can shed Henry J.
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Old 05-01-2018, 08:43 AM
PearlJamNoCode PearlJamNoCode is offline
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I have no interest in buying a Gibson. The company’s poor record on treating their employees sealed Gibson’s fate for me years ago. I hope beyond shedding debt they can shed Henry J.
I feel the same way, but if they're forced to liquidate their 12 fret L-00 stock at 99% off, I'd be first in line.
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Old 05-01-2018, 08:45 AM
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I've heard this too. I've also read that some Chinese companies were chomping at the bit to buy Gibson but they wanted to wait until the bitter end.

I really hope this isn't the case and I hope that the CEO is canned."
For many of us it would be a shame to see an iconic American company be purchased by a foreign business. For most others, it wouldn't matter one iota.
Personally, if they were purchased by a Chinese group and they made great and consistent guitars in the states, I'm ok with it.
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Old 05-01-2018, 08:49 AM
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I wonder what will happen to Henry J., the guru, the saviour, the genious behind Gibson? Just a very few years ago I read an article where he was basically patting himself on the back and saying how he was going to take Gibson to the stars, make it a household name even amongst non musicians.

There are companies that for whatever reason get into a rut of bankruptcies. Gander Mountain is one, for just one example. It once was the largest chain sporting goods store in the country; sold several times to various other companies just to keep its head above water, but nonetheless filed bankruptcy 2 or 3 times in the past 40 years or so. For some companies it seems that they develop a pattern, their corporate "DNA" gets into poor management and bankruptcy "grooves."

The pattern in these companies seems to be continued mismanagement and if I dare say so, greed. They seem not to be able to control their ever self consuming, self destructive lust for expansion to the point they cannot properly manage their size. In the case of GM, this seems to be the cycle they follow after each bankruptcy. JMO
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Old 05-01-2018, 08:49 AM
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Originally Posted by stephenT View Post
I have no interest in buying a Gibson. The company’s poor record on treating their employees sealed Gibson’s fate for me years ago. I hope beyond shedding debt they can shed Henry J.
One of articles I read mentioned that he might be restructured out of the decision making equation , we will see
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Old 05-01-2018, 08:53 AM
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Gibson survived 70s , should survive this sid
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Old 05-01-2018, 08:55 AM
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When companies get into financial trouble it's almost always caused in part by straying too far from it's core business. This is usually included in their BK statement, with a promise to return to their original guiding principals. Good luck to Gibson, hope you make it to the other side.
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