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Guitar firm Gibson files for bankruptcy

(Image credit: Rick Diamond - Getty)

Guitar firm Gibson Brands has filed for Chapter 11 bankruptcy protection in the US as the company battles up to an estimated $500 million of debt.

As a result, the Nashville-based firm have announced restructure plans that will see them wind down their consumer audio and home entertainment business and concentrate on musical instruments. 

Music Radar (opens in new tab) report that the restructure plans will give lenders equal ownership of a new company and replace current stockholders, including CEO Henry Juszkiewicz, who will remain in position during the change of control.

A statement reads: “Gibson will emerge from Chapter 11 with working capital financing, materially less debt, and a leaner and stronger musical instruments-focused platform that will allow the company and all of its employees, vendors, customers and other critical stakeholders to succeed."

Juszkiewicz adds: “Over the past 12 months, we have made substantial strides through an operational restructuring. 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.

“Importantly, this process will be virtually invisible to customers, all of whom can continue to rely on Gibson to provide unparalleled products and customer service.”

A federal judge will have to approve the plans, with reports indicating that 69% of the company's secured lenders support the move.

Gibson’s iconic guitars have been used by artists including Slash, Jimmy Page, B.B. King, Dave Grohl, Angus Young, Joe Bonamassa, Sylvain Sylvain and Johnny Thunders.

Scott looks after and updates Louder’s online buyer’s guides and also scouts out the best deals for music fans from every corner of the internet. He's spent more than 28 years in newspapers and magazines as an editor, production editor, sub-editor, designer, writer and reviewer. Scott joined our news desk in the summer of 2014, where he wrote extensively about rock, metal, prog and more, before moving to the eCommerce team full-time in 2020. Scott has previous written for publications including IGN, Sunday Mirror, Daily Record and The Herald covering everything from daily news and weekly features, to video games, travel and whisky.