Gibson declares bankruptcy

What many musicians feared and expected has happened: The maker of Gibson electric and acoustic guitars and other instruments has filed for bankruptcy protection.

The company said it will focus on what it considers its core brands.

In an announcement, Gibson Brands Inc. Tuesday announced it will be “re-focusing” the company on the “manufacturing of world-class, musical instruments and professional audio products and the continued development of the company’s portfolio of iconic, globally-recognized brands including Gibson and Epiphone.”

Gibson said it has reached a “restructuring support agreement” with holders of more than 69 percent in principal amount of its 8.875 percent senior secured notes due this year, and its principal shareholders, that clears the pathway for the continued financing and operations of the musical instruments business.

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“To implement the agreement, the company and its U.S. subsidiaries today filed pre-negotiated reorganization cases under chapter 11 of the U.S. Bankruptcy Code,” Gibson said.

“The filings will allow the company’s musical instruments and professional audio businesses to continue to design, build, sell, and manufacture legendary Gibson and Epiphone guitars, as well as KRK and Cerwin Vega studio monitors and loud speakers, without interruption,” Gibson said.

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Though some investors earlier had reportedly pushed for a leadership change at Gibson, there was no indication in Tuesday’s announcement that the company’s current chief executive, Henry Juszkiewicz, was going anywhere, at least for now.

"We are grateful for the continued support from our employees, customers, dealers, partners and suppliers as we move through the restructuring process,"  Juszkiewicz said in the company’s statement. "The Gibson name is synonymous with quality and today's actions will allow future generations to experience the unrivaled sound, design and craftsmanship that our employees put into each Gibson product."