New Delaware Chapter 11 Filing – Gibson Brands Inc.

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Gibson Brands Inc., along with eleven subsidiaries and affiliates, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-11025).  Gibson, a Nashville, TN-based music equipment company, is most famous for its iconic guitars, including the Les Paul and the Flying V.  According to the First Day Declaration, Gibson has filed a result of a debt overhang and the headwinds Gibson’s consumer electronics business has faced since being acquired in a highly leveraged transaction in 2014.  According to a press release issued by Gibson, Gibson enters Chapter 11 having entered into a restructuring support agreement with an Ad Hoc group of its Senior Secured Noteholders, who will also backstop and fund a $135 million debtor-in-possession financing facility sufficient to take out Gibson’s pre-petition secured lenders and provide Gibson with funding throughout the Chapter 11 case.  The DIP Motion and Plan have not yet been filed.  Prime Clerk is the proposed claims and noticing agent.  The cases have been assigned to the Honorable Christopher S. Sontchi.

Contact Norman L. Pernick or G. David Dean for more information regarding this matter.  Please note, however, that Cole Schotz P.C. does not represent the debtors in these cases and cannot respond to questions directed toward the debtors.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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