Music legends Les Paul, then 88, left, and B.B. King, then 77, at a jam session at the third anniversary celebration of the B.B. King Blues Club and Grill in New York’s Times Square, in 2003. AP Photo/Richard Drew

Investors want a new CEO at Gibson

Prospective investors want a new chief executive at Gibson Brands Inc. before unlimbering their wallets to help the embattled company.

A recent Bloomberg report says a group of debtholders advised by PJT Partners Inc. is pushing for a restructuring that would hand them ownership of the guitar maker and let them establish new leadership, according to sources that Bloomberg refers to only as “people with knowledge” of plans for the company.

RELATEDGibson pushes back against bankruptcy talk, hires new CFO

“The holders don’t expect Gibson’s earnings will be strong enough to attract new money for a refinancing to head off a default looming later this year, and creditors are reluctant to invest more funds while (Gibson CEO Henry) Juszkiewicz is still in charge, the people said,” according to Bloomberg.

Known as "Henry J," the owner of the iconic company since the mid 1980s began alienating fans of his instruments from the start. While the company still makes billions selling its iconic guitars, Dayton Daily News business writer Tom Gnau explains why the company continues to lose money and why the CEO is so despised.

The sources for the story apparently asked to remain unnamed. The debtholders claim to control some two-thirds of Gibson’s outstanding debt, notes that come due in August.

RELATED: Gibson, facing half-a-billion in debt, lays off custom shop workers

Gibson is the maker of some of the most enduringly classic electric guitars, including the Les Paul, the ES-335, the SG and many others.

But while some observers have said that Gibson’s core guitar business is sound, numerous brands that fall under the Gibson corporate umbrella may be weighing the company down.

Juszkiewicz is said to be working with Jeffries Group LLC on a refinancing package to address debt.

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In all, Gibson is said to be facing some $520 million in debt that is approaching maturity.

Some investors are “not looking to get paid back and get interest, but have other intentions that are not necessarily my intentions,” Juszkiewicz, 64, told Bloomberg News last month.

Juszkiewicz bought Gibson in 1986 with a group of investors and moved the company from Michigan to Nashville, Tenn.

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