People and businesses who file for bankruptcy go through some of the most difficult times in their lives. We work with them so that they can see that there is a light at the end of tunnel. With this in mind, nearly all of us here in the “Live Music Capitol of the World” will be happy to hear that Gibson Guitars is coming back from Chapter 11 Bankruptcy. Many of us have enjoyed playing their products and even more of us have seen and heard the iconic company’s many great models played by favorite musicians. The Chapter 11 filing enables a business entity to restructure its debt and create a workable plan for paying back debt while still staying in business.
Bad things can happen to good companies
The fact is that even an apparently successful company with more 100 years of history can fall on hard times, even if it sells an average of 170,000 guitars annually in more than 80 countries. The company also owns Baldwin Pianos and Wurlitzer organs as well as international companies TEAC electronics manufacturing, KRK, Cerwin Vega and Stanton, which is a home electronics company. Gibson accumulated an estimated $500 million dollars in debt, mostly for ill-advised attempts to enter the headphones and home entertainment markets.
Changes in the business
The Nashville-based company announced recently that it would have a new crop of executives, led by the former head of Levi Strauss & Co. as CEO. The investment firm Kohlberg Kravis Roberts & Co. assumed ownership of the company as of November 1, 2018. The company will again focus on manufacturing Gibson and Epiphone guitars, including the legendary Les Paul model.
Bankruptcy is not the end
Filing bankruptcy is a tool provided by the government that allows citizens and businesses to seek debt relief. While no one dreams of growing up and filing bankruptcy, it is a safety net for those who have endured the loss of a job, a medical emergency, or made poor business decisions. A qualified attorney can help individuals and businesses with the filing process and the restructuring of the debt, so clients can turn their business or life back toward that light at the end of the tunnel.