Legendary U.S. Guitar-maker Gibson Files for Bankruptcy

Restructuring plans aim to phase out part of company

Image Credits: Jesse Wild/Guitarist Magazine via Getty Images.

Gibson Brands Inc, the maker of guitars played by the likes of B.B. King and Elvis Presley, filed for Chapter 11 bankruptcy protection on Tuesday with a plan to reorganize its musical instrument business under the new ownership of its lenders.

Nashville-based Gibson, whose legendary brands include Les Paul and SG, has been suffering under $500 million in debt linked to the acquisition of its consumer electronics business overseas, where sales have been in sharp decline.

In a filing in U.S. Bankruptcy Court in Delaware, Gibson said the overseas consumer electronics business will be wound down, allowing it to re-focus on its core guitar-making and audio businesses.

The audio business includes KRK, Cerwin Vega and Stanton headphones, loud speakers and turntables for amateur and professional musicians and sound engineers.

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