Last month, we reported that creditors were close to approving a bankruptcy exit plan for Gibson Guitar.
Now, the U.S. Bankruptcy Court for the District of Delaware has officially approved Gibson’s plans for reorganization. Attorneys representing various parties in this case alerted Digital Music News to the development late Tuesday (October 2nd).
The court’s ratification represents the last major step prior to exiting Chapter 11 bankruptcy proceedings. That leaves a few formalities, and Gibson’s bankruptcy case is expected to close in early November.
“Today’s confirmation of our plan of reorganization is a significant milestone toward completing our restructuring and beginning a new chapter for Gibson as a stronger company with essentially no debt and a bright future,” wrote Brian Fox, Gibson’s Chief Restructuring Officer.
“Focusing on our iconic brands and core musical instruments, Gibson is poised to continue as one of America’s premier manufacturers of musical instruments with a clear path that will benefit our customers, business partners and employees over the long term.”
Of course, Gibson isn’t emerging from this process unscathed. Quite the opposite: Gibson’s C-level leadership has largely been eviscerated, with CEO Henry Juszkiewicz losing most of his ownership share and all of his authority within the company.
Ahead of Tuesday’s court approval, Gibson also replaced its CFO — perhaps for obvious reasons.
Here’s a quick overview of the changes at Gibson post-bankruptcy.
- Gibson’s Musical Instruments and Professional Audio units will continue to design, build, sell, and manufacture Gibson and Epiphone guitars, as well as KRK and Cerwin Vega studio monitors and loud speakers.
- The plan also provides continued funding for the musical instrument and professional audio businesses, while offering continued support for vendors and suppliers.
- Gibson’s entire balance sheet is being overhauled post-bankruptcy, which probably includes dropping non-core businesses.
The Gibson ‘bankruptcy hotline’ is now a thing.
For those tied into Gibson’s bankruptcy imbroglio, a ‘Restructuring Hotline’ has been set up. For those inside the U.S., the number is 1-844-240-1258 (those outside of the U.S. can call 1-929-477-8085). Email queries should be directed to [email protected]
Copies of the plan and disclosure statement materials and other court filings and documents related to the court proceedings can be found here.