In a move that may surprise and sadden music lovers in the Tallahassee area, Gibson Brands, Incorporated, famous for making electric and acoustic guitars, has filed for bankruptcy protection under Chapter 11.
Apparently, the company has already negotiated a debt relief plan with their largest creditors and submitted the same to the bankruptcy court for approval. The plan will allow the company to stay in operations with the help of millions in additional loans.
The company has existed for over 100 years. Currently, it sells well over 150,000 guitars annually and around the world. The company has a particular aptitude for selling high-end electric guitars, many of which are or have been used by some of the world’s most famous musicians.
Some blamed the company’s recent financial struggles on a decision to move beyond the guitar business and start also producing and selling home electronics, a move that some think may have hurt the company’s reputation as a guitar manufacturer.
The lessons of the case are, first, that no business is too well-established or too noteworthy not to have financial trouble from time to time. The business world is hard and requires managers to be at the top of their game continuously. Luck also plays a role in a business’s success. There is certainly no shame when a business has to get some help through the bankruptcy system in order to get back on its feet.
Second, all types of bankruptcy, but particularly Chapter 11 bankruptcies, go most smoothly when effective negotiations are conducted both before and during the process. This will often require the assistance of an attorney who has experience dealing with a client’s creditors and navigating a client through the bankruptcy process.
Source: The Florida Times-Union, “Iconic guitar make Gibson seeks bankruptcy protection,” May 1, 2018.