After 116 years of being a dominant force in the guitar industry, Gibson Guitars has officially filed for bankruptcy.
As MusicRadar reports, the company has officially filed for Chapter 11 bankruptcy protection, with an estimated debt of USD$500 million. Lenders have agreed to a short-term loan of up to USD$135 million to fund operations.
Back in February, it was reported that the company was facing a USD$375 million debt repayment deadline in less than six months’ time, and another USD$145 million in bank loans which would mature if they weren’t refinanced or repaid by 23rd July.
A turnaround plan has been devised over the past 12 months which has helped the company make “substantial strides”, according to CEO Henry Juszkiewicz.
“The decision to re-focus on our core business, musical instruments, combined with the significant support from our note-holders, we believe will assure the company’s long-term stability and financial health,” he said.
Gibson started back in 1902 in Michigan, but has been based in Nashville since 1984, and is best known for their iconic Les Paul and SG models. The company sold around 170,000 guitars a year, although its annual revenue fell by USD$400,000,000 between 2014 and 2017.