It's official - Gibson files Chapter 11 Bankruptcy

[elgravos]

It was a long time coming:

https://new.reorg-research.com/data/firstday/437046_0.pdf

Hope someone competent takes over and sorts the mess out. Shame it had to come to this but things can only improve.

 

[Hendrix]

the date is 15/1/2018, early this year ?

 

[elgravos]

I see 5/1/18 at the top of each page for date of filing / date of signature by Henry.  Definitely today.

 

[AirCap]

Yup. The wild ride of Henry J begins today!

 

[Cagey]

Phbbt. I sincerely doubt ol' Henry's in any danger of living in a refrigerator box under a bridge somewhere. He's just at the apex of the of the Peter Principle, where a dingbat gets promoted well past his level of competency. It's all downhill from here for him, but it won't cost him much personally.

 

[elgravos]

Well he does own over 30% of Gibson, which now equates to 30% of nothing...  but that hit is well deserved as it's entirely self inflicted.  I'm sure he's taken plenty of cash / equity out of the business over the years and isn't going to have to sell the Mercedes and the mansion(s) to make ends meet.  What offends me is that he doesn't even have the decency to step down immediately now that they've filed.  Hopefully the administrator will fire him asap. 

 

[bagman67]

It's not 30% of nothing, nohow.  There's tremendous value in the brands Gibson owns and in the machinery and inventory and customer relationships.  The losers here will be Gibson's creditors, and probably some workers.  The point of Chapter 11 is not to liquidate, it's to allow the company to survive by forcing its creditors to take a partial haircut instead of losing everything.  Gibson will continue, but it will not surprise me to see a lot of the brands Gibson bought up either sold off or put out of their low-margin misery.  And Henry will probably lose his job, but as others have remarked, he is in no danger of missing a meal over any of this.

 

[aarontunes]

Yep...saw this news on my phone early this morning. I was surprised when I got to work and the internet still worked.

 

[TonyFlyingSquirrel]

Yep...saw this news on my phone early this morning. I was surprised when I got to work and the internet still worked.

I can only imagine those calls.  "So dude, ya gonna make Gibson bodies again bro?"

 

[musicispeace]

I'd like to see Gibby concentrate on decent versions of the LP, SG and 335 and drop all the rest of it. A working man's version and a deluxy version of each. For under $5000 apiece would be nice as well.

 

[elgravos]

I don't deny there is tremendous value in the brand, I just think the bondholders are going to require that Henry hand over the keys and title to the house as a condition of the restructuring.

It's not 30% of nothing, nohow.  There's tremendous value in the brands Gibson owns and in the machinery and inventory and customer relationships.  The losers here will be Gibson's creditors, and probably some workers.  The point of Chapter 11 is not to liquidate, it's to allow the company to survive by forcing its creditors to take a partial haircut instead of losing everything.  Gibson will continue, but it will not surprise me to see a lot of the brands Gibson bought up either sold off or put out of their low-margin misery.  And Henry will probably lose his job, but as others have remarked, he is in no danger of missing a meal over any of this.

It would be nice to see Gibson focus on a more limited line of US made high quality instruments and leave all the sub $1000 ranges to Epiphone / Korean manufacture - similar to what PRS have done, but there is probably too much money to be made selling Gibson guitars to allow that.

 

[stratamania]

To avoid confusion between 5/1/2018 and 1/5/2018 in this case it means the 1st May 2018.

I now own a "pre-Chapter 11" Les Paul, and a Philips phone at home which is a Gibson Brand, it said it on the packaging.

 

[Rick]

http://variety.com/2018/biz/news/gibson-iconic-guitar-company-files-for-chapter-11-bankruptcy-protection-1202793510/

Meh ... basically they had neither affordability or good quality ... did play an SG made in the 70's that was pretty sweet, but anything since say, 1998, never liked ... too expensive and too cheap at the same time, probably played the wrong one but all it takes is one to turn you off to a whole brand.

Besides, I'M A WARMOTH MAN!  :turtle:

I wonder if they'll be moving any stock, or firesales?

 

[Re-Pete]

It's not 30% of nothing, nohow.  There's tremendous value in the brands Gibson owns and in the machinery and inventory and customer relationships.  The losers here will be Gibson's creditors, and probably some workers.  The point of Chapter 11 is not to liquidate, it's to allow the company to survive by forcing its creditors to take a partial haircut instead of losing everything.  Gibson will continue, but it will not surprise me to see a lot of the brands Gibson bought up either sold off or put out of their low-margin misery.  And Henry will probably lose his job, but as others have remarked, he is in no danger of missing a meal over any of this.

I'm from Australia so excuse me if my understanding of how Chapter 11 works is wrong here,  but I had seen comment that the creditors boxed Henry & his management team into this or else it was going to be full on Bankruptcy/Liquidation. If it had gone that far, the company would have stopped work immediately and the creditors would have had to re-start or sell off everything themselves. This way they've forced the execs at Gibson to own up to the debt & look at how they can restructure the business to meet the debt either partially or fully.

I have also seen comment that Henry's investment is as good as gone as the creditors will be asking for that upfront & gift them control of the business. It's also presumed he will go and many of his yes men with him.

But feel for the folks who work on the floor at Gibson. They've probably tried to make the best product they can and some of the changes are probably so dollar driven it's made the products inconsistent. Imagine being someone who likes their work and seeing the inconsistency constantly making the work you do inferior. Like being a truck driver being made to drive a truck that constantly breaks down. But the truck was 10% cheaper than the best reliable one so the company went with that.

Now those folks are facing an uncertain future (though many knew this day would happen) & just in the Gibson line it won't stay the same after this. Changes will happen.

Ideally, you would like to see the Gibson brand stay USA made. But the Montana & Tennessee factories may have to amalgamate & I won't expect a long line of models under the Gibson banner in the coming years. Accompanied by Epiphone I still think they could become a good product line from Beginner to Custom Shop models, just not so many.

 

[Seamas]

http://variety.com/2018/biz/news/gibson-iconic-guitar-company-files-for-chapter-11-bankruptcy-protection-1202793510/

Meh ... basically they had neither affordability or good quality ... did play an SG made in the 70's that was pretty sweet, but anything since say, 1998, never liked ... too expensive and too cheap at the same time, probably played the wrong one but all it takes is one to turn you off to a whole brand.

Interesting.

I always understood the post-Norlin years, at least the first decade or so, to be a considerable step up for Gibson as far as quality control goes, and that the 70s were as bad for Gibson as it was for Fender and Martin.

 

[swarfrat]

Still no talk of the only thing that can save Gibson... Henry's head on a platter (so to speak). Lots of you and me speculating on its inevitability, but not hearing the actual noises from the people who have to make it so.

 

[AirCap]

Still no talk of the only thing that can save Gibson... Henry's head on a platter (so to speak).

Don't kid yourself. There is PLENTY of that mentioned in the myriad articles I've read in the last couple months about Gibson and their supposed impending doom. Also, it's been talked to death on most of the guitar oriented forums I visit on a daily basis. People KNOW Henry has got to go. And frankly, I don't many of us will miss his sorry butt.

 

[Cagey]

CEOs make a difference. Look at how dramatically Microsoft has improved since Steve Balmer's been gone. Same sort of mismatch, too. He was a dish soap guy before he was a software guy, which makes about as much sense as hiring a geologist for head of surgery at a major hospital.

 

[swarfrat]

A geologist might be a good fit for Gibson though. Someone who knows about ancient rock.

 

[Hendrix]

[youtube]sr54g5l11n0[/youtube]

maybe a good move for both JB and Gibson