The iconic American guitar manufacturer Gibson has filed for Chapter 11 bankruptcy protection, USA Today and other outlets have reported. Gibson has suffered several financial setbacks amid a declining market for guitars in recent years, and recently released a statement that it had “met all current obligations to the bondholders” after an earlier report that bankruptcy was imminent.
Gibson was founded in 1894 and counts instantly recognizable guitar designs in its lineup, including the Les Paul (one of the first mass-produced electric guitars with a solid body) and the SG (a slightly later designed seen played by Angus Young of AC/DC in the image above). Many other iconic guitarists, including B.B. King, Jimmy Page of Led Zeppelin, Chuck Berry, and Tony Iommi of Black Sabbath, are known as Gibson players.
According to the bankruptcy filing, Gibson plans to continue manufacturing instruments under its flagship brand as well as sub-brands like Epiphone and Dobro after shedding its debt, but will close its Gibson Innovations wing, which manufactures consumer electronics like headphones under the Philips brand. Gibson’s bankruptcy plan has the support of 69 percent of the company’s secured lenders, but will have to be approved by a judge and could face objection from unsecured lenders, USA Today reports.
“Over the past 12 months, we have made substantial strides through an operational restructuring,” Gibson CEO Henry Juszkiewicz said in a statement. “We have sold non-core brands, increased earnings, and reduced working capital demands. The decision to re-focus on our core business, Musical Instruments, combined with the significant support from our noteholders, we believe will assure the company’s long-term stability and financial health.”