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Gibson guitar company reportedly on the brink of bankruptcy

Monday, February 19, 2018 7:49 AM PT

Legendary guitar manufacturer Gibson is reportedly facing bankruptcy, according to a new report.

Despite more than $1 billion in annual revenues, the Nashville, Tennessee-based music instrument maker must quickly deal with some major debut issues.

The Nashville Post describe's the company's financial bind: "CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature. On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013, are not refinanced by July 23."

"At the end of the day, someone will take control of this company — be it the debtors or the bondholders," Debtwire reporter Reshmi Basu told the Nashville Post this week. "This has been a long time coming."

Founded in 1902, Gibson has introduced a handful of icon products, including the Les Paul, Explorer, Flying V, and SG guitars. The company has been owned by CEO Henry Juszkiewicz since 1986, however, his tenure could be in jeopardy.

"This year is critical and they are running out of time — rapidly," said Moody's Investors Service senior credit officer Kevin Cassidy. "And if this ends in bankruptcy, he will give up the entire company."
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