Gibson officially saved from bankruptcy as former CEO exits
Iconic guitar manufacturers Gibson are set to live on into the foreseeable future, with their plans to avoid bankruptcy being formally approved.
Over the last year, we’ve posted on numerous occasions how the iconic guitar brand Gibson were heading for bankruptcy. After first playing down rumours earlier this year, the brand soon admitted that things looked bleak, before officially filing for bankruptcy, and receiving a lifeline loan of $135 million.
While fingers were undoubtedly pointed in the wake of this news, it was the current CEO, Henry Juszkiewicz, who conceded that the company’s status was a result of his apparently poor decision to try turn Gibson into a “music lifestyle company” by selling high-end audio equipment in addition to their regular catalogue of guitars.
“No, it wasn’t a great decision,” Henry Juszkiewicz confessed. “It didn’t work out very well. I think it was a rational decision, but it turned out to be a very poor decision, and it’s a decision I made. It is what it is.”
While it was noted back in August that the company were on the lookout for a new CEO, the company is now set to restructure itself after having their plan to exit bankruptcy approved this week.
As Billboard reports, Gibson’s plan was approved by a U.S. Bankruptcy Court on Tuesday. The actual plan involved the company’s $500 million worth of debt being wiped, with up to $70 million being invested as a “business plan for growth”.
The company is now set to be run by bondholders, which includes Kohlberg Kravis Roberts & Co. and Melody Capital.
However, one of the most noteworthy aspects of this whole plan is the removal of Henry Juszkiewicz as the company’s CEO.
As Bloomberg notes, both Juszkiewicz and Gibson co-owner Dave Berryman will have their equity stakes cancelled, and both receive a consulting agreement that will keep them from making negative comments towards the company for three years.
Back in August however, Henry Juszkiewicz seemed quite positive in regards to his future with the company.
“I will continue to aid Gibson for at least a couple more years, and my mission, really, is to pass on the knowledge and the tools to allow the next generation of management to really excel and bring the brand to a whole new level,” Juszkiewicz explained to Music Radar.
“And I would get a tremendous amount of satisfaction because I love Gibson and the brand, it’s part of my DNA at this point, and I want the company to do well.
Bloomberg also points out that Gibson’s new CEO has already been appointed, but has not yet been named officially.
While Gibson have said in the past they plan to explore other avenues – including ukeleles – in the future, Kohlberg Kravis Roberts & Co.’s Nat Zillkha hopes to see the company return to their status as one of the world’s leading music manufacturers.
“For us, establishing the credibility that we intend to deliver is important,” explained Nat Zillkha. “We are musicians. We care deeply about the brand and we are going to protect it.”
This article originally appeared on The Industry Observer, which is now part of The Music Network.