Duane Allman is mentioned in the article as one of the" iconic Guitar Heroes" who used Gibsn.
Sad day indeed. Duane & Gregg are weeping. The end of an era. Hope those millennials are happy with their iPods, digitally made "music", electronica, techno, and rap. Ugh.
Variety May 1, 2018
Gibson, Iconic Guitar Company, Files for Chapter 11 Bankruptcy Protection
By Jem Aswad @jemaswad Jem Aswad
Jem Aswad
As expected, Gibson Brands Inc. filed for Chapter 11 bankruptcy protection early Tuesday, the company announced today, with a turnaround plan that will give some of the company’s lenders equity ownership of the long-running guitar and musical equipment company that has become synonymous with classic rock and roll.
After several years of decline, the company has reached a restructuring support agreement with holders of more than 69.0% in principal amount of its 8.875% Senior Secured Notes due 2018, and its principal shareholders, that clears the pathway for the continued financing and operations of the musical instruments business as well as a change of control in favor of those noteholders. The petition estimated up to $500 million in debt, according to Bloomberg, and the lenders have agreed to an operating, or “debtor in possession,” loan of up to $135 million to fund operations.
“Gibson will emerge from Chapter 11 with working capital financing, materially less debt, and a leaner and stronger musical instruments-focused platform that will allow the Company and all of its employees, vendors, customers and other critical stakeholders to succeed,” the announcement reads.
Gibson, Iconic Guitar Company, Said to Be Nearing Bankruptcy
The change in control will give noteholders equity in a new company, replacing stockholders including Chief Executive Officer Henry Juszkiewicz, who owns 36 percent of the company, according to the filing. Those noteholders include Silver Point Capital, Melody Capital Partners LP, and funds affiliated with KKR Credit Advisors. Juszkiewicz and company president David Berryman will continue with the company upon emergence from Chapter 11 “to facilitate a smooth transition during this change of control transaction and to support the Company in realizing future value from its core business,” according to the announcement.
The Company’s Gibson Innovations business, an electronics division that Juszkiewicz has cited as a source of the company’s financial woes, will be wound down.
“Over the past 12 months, we have made substantial strides through an operational restructuring,” said Juszkiewicz. “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.
“Importantly, this process will be virtually invisible to customers, all of whom can continue to rely on Gibson to provide unparalleled products and customer service.”
The company filed a series of motions that, pending court approval, will allow the Company to operate its business throughout the process in the ordinary course, and to provide support to critical business-partners including vendors, shippers, and suppliers, the announcement says.
Insiders say the company, which was founded by Orville Gibson in 1902, has been struggling for several years under the leadership of Juskiewicz, who has been pursuing other revenue streams, including the electronic companies it purchased in recent years, as guitar sales have fallen over the past decade.
The company’s struggles may initially come as a surprise to observers who see vintage Gibsons selling for six figures on instrument sites — indeed, a 1960 Gibson Les Paul Standard could be yours today for a cool $595,000 — yet the company sees little material benefit from the sale of second-hand items and its newer models have not been widely successful. Conversely, its main competitor, Fender, has kept itself above water by introducing budget lines in recent years, a move Gibson only recently embraced.
The company has been synonymous with rock and roll since the 1950s with its models — the most popular include the Les Paul, the SG, the Firebird and several semi-acoustic lines — being used by virtually every iconic guitar hero, from Chuck Berry and B.B. King to Jimmy Page and Eric Clapton and Duane Allman to Slash and Johnny Marr to Gary Clarke Jr. Yet as rock music has fallen from mainstream popularity so have the guitar sales that form the bulk of Gibson’s business.
I was in a big music store just recently and ask the owner which electric guitar was the best seller. He surprised me. At his store all makes are down in volume and a Gibson SG sold best in 2017. Nationally the best seller was a Fender Telecaster. He said Ibanez is a big seller nationally and is a brand favorite of heavy metal players. Dickey used an Ibanez Artist at two Hank Jr. shows Dickey was on about 1983. That and Paul Reed Smith are two brands Dickey has used that was surprising to me when it happened. Warren played Paul Reed Smith a lot and a Strat with a red headstock that some prick stole during his first years with the ABB.
I would have guess either a Les Paul or Strat would be number 1but if that store owner is right it's Tele, SG and Ibanez guitars.
Freddy King was a Gibson man both ES-335 and Les Paul. Dickey, Warren and the late Gary Moore often used Les Paul's as did the late Les Paul 
I recently discovered Gary Moore used a 61 red Strat rather often too but Les Paul's the most. Joe Bonamassa is a big Les Paul player who also plays Strats more than I thought.
I think Clapton played a Les Paul early in his career then a Firebird and an SG later with Cream. But since about 1969 Clapton usually plays a Strat as we all know. Eric hasn't been a big Gibson player for decades.
I hope Gibson can emerge from this in good shape. Gibson and Fender are like Ford and Chevrolet here in the states. Classic brands.
Don't sell your Gibsons, kids! Looks like they will be worth a fortune in a few years.
Less kids want to play guitar now. not many have 3500 dollars for a gibson les paul, or even $2000 for a fender strat. [$4000 for a custom shop strat] that being said, both companies make "budget" models [epiphone, and squier] that are awesome. and there are loads of guitar makers competing with the "big two". baby boomers have the disposable income to purchase vintage and custom shop/ boutique guitars, but they are dying off.
[Edited on 5/1/2018 by pops42]
I don't know about that. Plenty of kids and students in my son's music school taking lessons. As for Gibson, why pay 2 grand when you can get a great sounding Epi that is $500 especially when dad is paying. It's a shame Gibson is facing financial difficulties but it's the company's own fault. Arrogance and greed IMO.
Less kids want to play guitar now. not many have 3500 dollars for a gibson les paul, or even $2000 for a fender strat. [$4000 for a custom shop strat] that being said, both companies make "budget" models [epiphone, and squier] that are awesome. and there are loads of guitar makers competing with the "big two". baby boomers have the disposable income to purchase vintage and custom shop/ boutique guitars, but they are dying off.
[Edited on 5/1/2018 by pops42]
That's their main problem (IMO) they've priced themselves out of the market.
If I want to satisfy my SG, Les Paul, or Flying V fix, I'll go with Epiphone (or another similarly priced brand) for 1/4 or 1/5 the cost.
Just outta curiosity I went on to ebay......
Gibson 1953 Les Paul gold Top - Original Vintage EXCELLENT CONDITION
https://www.ebay.com/itm/Gibson-1953-Les-Paul-gold-Top-Original-Vintage-EXCELLENT-CONDITION/372275613903?hash=item56ad5b10cf:g:IKMAAOSw-0xYNd75
Everyone has a plan, till you get punched in the face,
Less kids want to play guitar now. not many have 3500 dollars for a gibson les paul, or even $2000 for a fender strat. [$4000 for a custom shop strat] that being said, both companies make "budget" models [epiphone, and squier] that are awesome. and there are loads of guitar makers competing with the "big two". baby boomers have the disposable income to purchase vintage and custom shop/ boutique guitars, but they are dying off.
[Edited on 5/1/2018 by pops42]
That's their main problem (IMO) they've priced themselves out of the market.
If I want to satisfy my SG, Les Paul, or Flying V fix, I'll go with Epiphone (or another similarly priced brand) for 1/4 or 1/5 the cost.
While not everyone can afford a Gibson and Epiphone definitely is a good product, they do not matchup with quality, craftsmanship. There is a reason that they are 1/4 of the price. Truth is when CMI (also owned Gibson) acquired Epiphone, it's role was primarily to make cheaper/more affordable versions of their own products. So while I agree that you can certainly buy a Epiphone Les Paul cheaper but you are getting less also. Debates can rage about whether the elevated prices are worth the difference of course. I have played many excellent Epiphone guitars and not one of them comes even close to my Gibson Les Pauls.
Part of the problem with Gibson (and Fender) is that they tried to create lower costing versions of their star products. Bad idea. It dilutes the market and created various versions of these instruments. But had to compete with cheap knock offs everywhere and they saw it as lost market share.
Now Epiphone guitars are made by various companies so you definitely get mixed results. Now that created a guitar world where companies are making knock offs of the guitars that were already knock offs.
Result is there are so many price points on various types of Gibson standards like the Les, Pauls, SGs, etc. So you can buy some Gibsons for less than some Epiphone guitars which are a knock off of a Les Paul.
Fender has made the same mistakes and are not in a solid business place either.
In the 80s, a buddy handed me a Tokai Strat copy and a Fender Strat. Tokai was supplying Fender with hardware, electronics and wood. The result. The Tokai was every bit as good as if not better than the Fender. Everything on the two guitars was virtually identical.
Sad Day for guitars but maybe good for buyers.
[Edited on 5/2/2018 by CanadianMule]
I think Gibson will carry on. From what I read, their musical instrument division has had strong sales throughout, but they were being dragged down by all the other brands they had bought. I'm guessing they went overboard on acquiring as a way to bury profits for tax purposes. I think they can come through this period with new leadership and a better understanding of the need to stick with their core mission, to make awesome high-quality instruments.
...and yup, I've been a Gibson lover since I bought a '68 LP Goldtop with my newspaper money when I was in 7th grade... The guitars I make now are definitely inspired by the old Gibsons and are made much the same way, no CNC.
I was fortunate enough to create two marquetry designs for the Gibson Custom Shop in the early 2000's when they had the Visual Artist Program running. They are both owned by a collector in France now. Here's the 2nd that is on a '55 LP Jr re-issue.
[
Jimi Hendrix cropped for postcard by jmacs1959, on Flickr]
And my own that I made- Tribute to Clapton
[
Goodbye Cream cropped by jmacs1959, on Flickr]
Hope those millennials are happy with their iPods, digitally made "music", electronica, techno, and rap. Ugh.
What an odd thing to say.
https://reverb.com/news/how-will-the-gibsons-bankruptcy-affect-used-gibson-prices
Here's an interesting read from a very knowledgeable brain regarding the market.
