Tue, May 08, 2018 - Page 14 News List

Gibson Files for Bankruptcy in Deal to Renew Guitar Business
吉普森提出破產申請 協商重啟吉他業務

Guitarist Keith Richards, holding a Gibson ES-355 guitar, performs with the Rolling Stones in Nanterre, France on Oct. 19 last year.

Photo: AFP

Gibson Brands Inc. has filed for bankruptcy protection, with lenders taking control of the iconic American business that has supplied guitars to many famous musicians including B.B. King, Elvis Presley and Pete Townshend from the Who.

The filing of the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 last Tuesday keeps Gibson in business but gives ownership to noteholders, replacing stockholders that include Chief Executive Officer Henry Juszkiewicz, the company’s leader for more than three decades.

The restructuring plan will allow the instrument business to “unburden” itself of a consumer-electronics unit that Gibson blamed for its financial woes. Gibson owes as much as US$500 million, and lenders will provide a new loan of up to US$135 million to keep the company in business, according to court papers.

Juszkiewicz, who has found himself at odds with creditors in recent months, will continue with the company upon emergence from bankruptcy “to facilitate a smooth transition,” according to the agreement. Court papers call for a one-year consulting deal and compensation package for Juszkiewicz. A representative for the company didn’t respond to questions about whether Juszkiewicz will remain as CEO or in a separate role.

Gibson, founded in 1894, sells over 170,000 guitars annually in 80 countries. Its guitars are US-made, with factories in Nashville and Memphis, Tennessee, and Bozeman, Montana.

Its Gibson Innovations business, which sells audio products like speakers, headphones, and DJ equipment, was the source of its financial woes, according to a court statement from Brian Fox, a managing director at Alvarez & Marsal who will serve as the company’s chief restructuring officer. The unit will be wound down, according to a Gibson news release.


1. bankruptcy protection phr.

破產保護(po4 chan3 bao3 hu4)

2. noteholder; lender; creditor n.

債權人 (zhai4 quan2 ren2)

3. stockholder n

股東 (gu3 dong1)

4. restructuring plan n. phr.

重組計畫 (chong2 zu3 ji4 hua4)

5. compensation package n. phr.

補償性薪酬 (bu3 chang2 xing4 xin1 chou2)

6. deleveraged adj.

去槓桿化 (qu4 gang4 gan3 hua4)

Juszkiewicz bought the audio and home entertainment business from Koninklijke Philips NV in June 2014 for US$135 million as part of a bid to relaunch Gibson Guitars as Gibson Brands Inc., a “music lifestyle” company. He also bought a line of consumer electronics from Japanese company Onkyo Corp. in his bid for diversification. But the purchases drained cash and earnings plunged.

Management, creditors and consumers alike see strong potential for Gibson’s iconic music business. But challenges have abounded, beyond the ill-fated expansion into consumer electronics.

In recent years, Gibson faced tighter credit terms from its suppliers and growing pressure from new import regulations on rosewood, a crucial material for the company’s high-end instruments, according to S&P Global Ratings. Gibson had also developed a broken relationship with some retailers, a number of whom have stopped selling the brand, citing unmanageable demands that range from annual credit checks to upfront orders for a year’s merchandise.

With the noteholder agreement, the company has “an exit path from Chapter 11 as a deleveraged business, poised for continued growth,” Fox said in the filing. The hope is that a more nimble, reorganized company will be able to address its problems and return focus to the core guitar business.


吉普森品牌公司日前提出破產保護申請,由債權人掌管這間極具代表性的美國公司。該公司曾提供吉他給包括比·比·金、貓王,以及The Who樂團的彼特·湯森在內的眾多知名音樂人。



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