Gibson Guitars Will Exit Bankruptcy Under New Leadership, Henry Juszkiewicz is Out
The 124-year old guitar manufacturer Gibson will exit bankruptcy under new leadership by private equity firm KKR, Bloomberg is reporting. The company entered bankruptcy proceeding in May after a series of bad business decisions, including the acquisition of the consumer audio division of electronics company Philips, the introduction of robotic guitar tuners and other missteps left the company in poor financial condition in recent years.
One of the conditions for KKR’s investment in Gibson was that longtime CEO Henry Juszkiewicz be removed from the board. Juszkiewicz had tried unsuccessfully to sell Gibson or recapitalize but was unsuccessful, being forced to cut a deal with lenders in exchange for stake in the company.
The reorganized company will debut in early November with around 800 employees and an as-of-yet unnamed new CEO. Gibson will have a new board of directors, the majority of whom are guitar players according to KKR’s Matthew Ross… for whatever that’s worth.
As we said when this story first broke this past spring, it was difficult to imagine a scenario in which Gibson vanished entirely — the brand is too iconic and valuable to disappear without attracting investors who think they can turn it around. Now we’ll have to wait and see whether KKR can do the job. They certainly have a gigantic mess on their hands and a mountainload of debt to repay, that’s for sure.
More details available at Bloomberg.
[via Ultimate Guitar]