Gibson Guitars Inc, the name behind some of the most famous guitars, have filed for bankruptcy.
The announcement was made on Tuesday (May 1) that they would be filing for chapter 11 bankruptcy. The company is said to be “re-focusing, reorganizing, and restructuring” by shedding off some of their side businesses and just concentrating on their original mission of selling musical instruments.
Gibson CEO Henry Juskiewicz said in a statement, “Over the past 12 months, we have made substantial strides through an operational restructuring. We have sold non-core brands, increased earnings, and reduced working capital demands.”
The “non-core brands” that the company has shed in an effort to lessen its massive debt include an audio and home entertainment business that Gibson acquired for $135 million from multinational tech firm Phillips in 2014.
Gibson will continue to operate during its reorganization and bankruptcy proceedings, thanks to agreements it has reached with shareholders and noteholders.
The company’s debts are somewhere between $100 million and $500 million while its annual revenue fell by nearly half a billion in the last three years. It owes money to at least 26 other companies and vendors.