Iconic American guitar maker Gibson filed for bankruptcy Tuesday and said it had reached an agreement with its creditors on a deal that would let the debt-laden company survive.
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The maker of the storied Gibson Les Paul guitar said it expects to keep operating while it reorganizes around its core businesses. Gibson, which said it has debts between $100 million and $500 million, will replace its current stockholders — including controversial CEO Henry Juszkiewicz, according to MusicRadar.
“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,” Juszkiewicz said in a statement, according to The Wall Street Journal. “Importantly, this process will be virtually invisible to customers.”
The Nashville company reached an agreement with holders of more than 69% of its senior secured notes due in 2018 and shareholders that lets it continue to operate. Gibson also said existing noteholders have committed to provide $135 million in debtor-in-possession financing, according to the Journal.
While it expects to continue operations, the company said it will wind down its Gibson’s Innovation business, most of which is outside the United States.
