Legendary Gibson guitar company facing bankruptcy?

Legendary Gibson guitar company facing bankruptcy?

According to a report published by the "Dayton Daily News", Gibson guitar company is facing bankruptcy.

The company, indeed, recently saw the departure of its chief financial offer, Bill Lawrence. His leaving is seen as a bad sign “as $375 million in senior secured notes mature and $145 million in bank loans become due, if they aren’t refinanced by July”. Gibson also recently moved out of its Nashville warehouse, which it had occupied for over three decades.

Right now, company owner Henry Juskiewicz is trying to straighten things financially, “but is facing a battle with creditors over bad business decisions”. Gibson is hoping that its acquisitions of various electronic companies over the years will soon provide a much needed influx of funds.

An official statement from Gibson assured a solution to its bankruptcy problem is in sight, since the company “has met all current obligations to the bondholders, is in the process of arranging a new credit facility to replace the bonds, and fully expects the bonds to be refinanced in the ordinary course of business".

Juskiewicz also added that the company has been working to monetize its assets:

We have been monetizing assets like stock holdings, real property and business segments that could not achieve the level of success we expected. By monetizing these assets, we can reduce debt and generate funds to contribute to business segments that are thriving. It is important to our business to get back to the financial success we had to achieve the best financial terms in the refinancing of our company.