One of the marquee names in the guitar industry, Gibson, is preparing for life after bankruptcy. The nearly 116-year-old company submitted a plan to keep itself in business that was approved in a U.S. Bankruptcy Court on Tuesday (Oct. 2).
Gibson initially filed for Chapter 11 bankruptcy in May, with a reorganization plan already in place to allow them to keep operating with $135 million of lent money. After that, the company rededicated to making musical instruments, since much of its financial troubles stemmed from an ill-fated foray into consumer electronics.
The plan, per Reuters, is for Gibson to wipe its $500 million of debt and use as much as $70 million to galvanize its “business plan for growth.” Gibson will be run by its bondholders, including Kohlberg Kravis Roberts & Co. and Melody Capital.