Lifeline for Gibson Guitars?

After a few weeks of intense negotiation, Gibson Guitars’ creditors have agreed to a lifeline $135 million restructuring loan that should keep the company going at least until next year.

Last month, the company filed for Chapter 11 bankruptcy protection from being wound up by major creditors.

Its lawyers argued to the bankruptcy court that it had paid off $20 million worth of debts. But creditors have demanded certain conditions be met.

There would be a new management team, the consumer electronics division would be dissolved, and the long-term lease at the Tower Records building in Hollywood be terminated.

The big question is whether Gibson can pull itself out of its mess, given that guitar sales have dropped by a third in the last decade.

The electric guitar is no longer at the centre of music-making as it was, and Gibson is not the only guitar maker in trouble.

The demo shift shows that acoustic guitar sales are taking over, and more females are learning to play the instrument.

Brad Delson of Linkin Park told the Washington Post that new instruments are being embraced and traditional rock instruments gradually losing popularity.

“Today, they’re gravitating toward programming beats on an Ableton. I don’t think that’s any less creative,” he says.

“I’m open to the evolution as it unfolds. Musical genius is musical genius. It just takes different forms.”