By Shannon Frost Greenstein
Bad news, Les Paul fans.
After 116 years as ostensibly the globe’s dominant guitar manufacturer, Gibson Guitar Company is facing the threat of bankruptcy.
The creator of the iconic Les Paul Guitar, not to mention the Firebird and the Flying V, is struggling financially, despite bringing in nearly 1 billion a year in revenue. After the departure of Chief Financial Officer, Bill Lawrence, owner Henry Juskiewicz is attempting to keep the company above water while, “… facing a battle with creditors over bad business decisions.”
Gibson is currently facing the maturation of $375 million in senior secured notes, while $145 million in bank loans will be due if they aren’t refinanced by July.
Founded in 1902 in Michigan, Gibson is associated with a number of high-profile musicians, not the least of which is Les Paul himself.
In an official statement, Juszkiewicz states the company’s present course of action, saying, ““We have been monetizing assets like stock holdings, realty property and business segments that could not achieve the level of success we expected. By monetizing these assets, we can reduce debt and generate funds to contribute to business segments that are thriving.”
Gibson is assuring the public that a solution is already in the works, and that it expects its loans to refinance in the typical course of business. Experts also say Gibson is likely to survive bankruptcy, due to its name and stature in the industry.
Nonetheless, this is scary news for you guitar players who count on Gibson to supply a never-ending chain of Les Paul guitars. Here’s hoping the new business objectives will keep the company solvent!