Gibson Files for Bankruptcy

Gibson Files for Bankruptcy In a Play to Renew Itself

Gibson Brands Inc. filed for Chapter 11 bankruptcy protection in Delaware, May 1. Gibson Brands Inc. is the parent company of Gibson Guitars, Epiphone, and Dobro.

>> The case is Gibson Brands Inc., 18-11025, U.S. Bankruptcy Court, District of Delaware.


Gibson guitars are iconic, gracing the famous hands of everyone from Led Zeppelin to Lenny Kravitz. The Dobro brand is iconic, as well. Originally a small brand name for a resonator guitar company, it has become the de facto term for all resonator guitars, regardless of manufacturer.

The industry has seen this move coming. Gibson has debt over $500 million and is suffering from the combined effects of stagnant guitar sales and the costs of investing in a consumer-electronics unit.

Writes Bloomberg:

The restructuring will allow the instrument business to “unburden” itself of a consumer-electronics unit that Gibson blamed for its financial woes. Gibson owes as much as $500 million, and lenders will provide a new loan of up to $135 million to keep the company in business, according to court papers.

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  • The company has over $500 million is debt.
  • Gibson has been approaching investors about being sold.
  • They sell over 170,000 guitars annually in 80 countries.
  • The Gibson Innovations business (audio products like speakers, headphones, and DJ products) losses are a driving force in the bankruptcy.
  • Gibson will possibly emerge with it’s instrument business intact, but it’s consumer-electronics business not intact.

Moving Forward

This is not the end for Gibson guitars. The bankruptcy proceeding is a strategic decision to “restructure debt” and create a viable path for the Gibson company to stay alive.

“The Gibson name is synonymous with quality and today’s actions will allow future generations to experience the unrivaled sound, design and craftsmanship that our employees put into each Gibson product,” says Chief Executive Officer Henry Juszkiewicz, in a statement.

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