- Feb 11, 2009
- Reaction score
And let me clarify something. Just because Gibson may go bankrupt does not mean that Gibson guitars are gone for good. Whether in agreement with the creditors or in bankruptcy (Ch. 11 or Ch7), a buyer will be sought for Gibson's physical and intellectual properties (patents, trademarks, and copyrights). Gibson will be sold, regardless of whether by agreement with creditors, Ch. 11, or Ch. 7. "Gibson" is a well respected name in its sector, despite some recent customer experience. There is some value there, though probably not enough to satisfy all debts and pay the equity holders. The creditors will not be paid 100%, but I think they new the risk going in as evidenced by the 8.75% interest rate in a time when solid corporate debt carries an interest rat of around 3%. But I don't think any buyer is going to waste Gibson's name and designs in the industry, so there will still be Gibson guitars "under new management".