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Gibson, Iconic Guitar Company, Files for Chapter 11 Bankruptcy Protection

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
See full article at Variety »

Gibson Settles Exotic Wood Violation With Feds

Gibson Settles Exotic Wood Violation With Feds
Nashville, Tenn. (AP) — Federal prosecutors on Monday announced a deal to drop a criminal case against Gibson Guitar Corp. after the instrument maker acknowledged its importations of exotic wood violated environmental laws.

Nashville-based Gibson agreed to pay a $300,000 penalty, forfeit claims to about $262,000 worth of wood seized by federal agents and contribute $50,000 to the National Fish and Wildlife Foundation to promote the conservation of protected tree species.

"The agreement is fair and just in that it assesses serious penalties for Gibson's behavior while allowing Gibson to continue to focus on the business of making guitars," U.S. Attorney Jerry Martin said in a statement.

Gibson didn't immediately respond to messages left Monday seeking comment. The privately held company is considered one of the top makers of acoustic and electric guitars, including the iconic Les Paul introduced in 1952.

Gibson's decision to cooperate with the federal Lacey Act banning the import of
See full article at Huffington Post »

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