Guitar-maker Gibson Brands files for bankruptcy

Storied guitar maker Gibson Brands Inc. filed for bankruptcy protection Tuesday as the company has struggled with its debt load after a series of acquisitions.

The company, which filed for chapter 11 in U.S. Bankruptcy Court in Delaware, said it will continue to operate during the proceedings as it focuses on reorganizing around its core businesses. Gibson plans to wind down its Gibson’s Innovations business, which is largely outside of the U.S.

The Nashville-based maker of Gibson Les Paul guitars has been struggling with debt it took on to finance acquisitions of home-entertainment and audio-equipment makers years ago. Among businesses the company has added are some of Royal Phillips’s home-entertainment systems, TEAC and Onkyo stereos.

Gibson said it has reached an agreement with holders of more than 69% of its senior secured notes due in 2018 and shareholders that lets it continue to operate. The company also said existing noteholders have committed to provide $135 million in debtor-in-possession financing.

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