One of the most iconic American brands is undergoing some major changes.
Gibson Brands Inc. filed for Chapter 11 bankruptcy protection on Tuesday, announcing that the guitar company will go through a “change of control” transaction, according to Bloomberg.
The company, which has supplied legendary artists like B.B. King, Elvis Presley, Duane Allman, Joe Perry, Les Paul, Jimmy Page, and Billie Joe Armstrong with guitars, will put in a “turnaround plan that gives some of the company’s lenders equity ownership,” according to the announcement. Lenders will be providing a loan of “up to $135 million” to help Gibson stay in business and move into this next stage.
Gibson was originally founded in 1894 and has headquarters in Nashville, TN. The company also manufacturers other instruments and musical accessories, including acoustic guitars, electric guitars, guitar cases, straps, cables, audio equipment, and lifestyle products as well as pianos under its Baldwin Piano Company subsidiary.
Chief Executive Officer Henry Juszkiewicz will stay with the company through the bankruptcy to “to facilitate a smooth transition,” and the company restructuring will allow Gibson to wind down its consumer-electronics unit.
“Over the past 12 months, we have made substantial strides through an operational restructuring,” Juszkiewicz said in the announcement. “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.”
Gibson is well-known for its work creating the Gibson Les Paul electric guitar, which was first built in 1952, with contributions from guitarist Les Paul.
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