If Gibson goes under... no more copyrights?

[Harry Mac]

What will happen to the rights to make Gibson models should Gibson cease to exist? I know there were lawsuits filed against companies like Ibanez and ESP in the past for making Les paul, Explorer copies etc. Will any of these companies be allowed to resume production of these types of guitars?

 

[Bobby Mahogany]

The assets would be auctioned off and I'm certain many patents/copyrights would be bought.
In the end some company somewhere would hold the rights to the Gibson name(s) and models
and would exploit the designs and brands.

 

[Dave_W]

Trademarks. Not patents or copyrights.

Irrelevant, since Gibson is not going under.

 

[judson]

stop the silly talk

the Gibson name will out live most of MLP members.....

what they will be or what they will produce is yet to be seen

 

[chasenblues]

Actually Gibson has/owns a number of patents on things other than guitars.

 

[OldBenKenobi]

The Gibson trademarks, including the name, would be bought by another company.

 

[parts]

 

[Stinky Kitty]

 

[Platte City Paul]

Gibson the dog...

 

[Dave_W]

Actually Gibson has/owns a number of patents on things other than guitars.

Any patents would protect technology, e.g. robot tuners. But that's not what we're talking about here. Trademarks protect names, logos, and product shapes.

 

[Tone deaf]

If Gibson were to fail to refinance the debt, due in August, they would seek bankruptcy protection. That is that they would petition the bankruptcy court to protect them from their creditors.

Bankruptcy is the process through which ownership of the company and/or its assets is transferred from the equity owners (shareholders) to the creditors.

Protection from your creditors means you don't have to pay them (some temporarily, others permanently). As of the "Petition date" (i.e. the date you petition the court) all past payables and liabilities get suspended, until a future date when the court will deal with them. The idea behind this is to give the troubled company a little breathing room to chart a path forward, while preventing the creditors from sucking every last penny out of the company.

There are two general categories of bankruptcy: Chapter 7, which is a liquidation of all the assets of the company; and Chapter 11, under which the company tries to reorganize itself and eventually emerge from bankruptcy protection and live to fight another day. Through the process, the company can sell off whatever it wants (with the approval of the judge), cancel any contracts it wants, and do lots of other housekeeping that makes the company's financials more efficient. Until something is sold, the company's creditors essentially own "it." So, with trademarks, service marks and other intellectual property, that all remains in tact for the benefit of the creditors.

If there is a legit business that can be saved (i.e. strong sales of products or services) that could operate at a profit, were it not for overwhelming liabilities, the company is probably a candidate for Chapter 11. If value of the company's assets (on a forced liquidation valuation basis) is significantly greater than the value of the business as an ongoing concern, or if the company can't arrange interim financing while in bankruptcy (i.e. "debtor in possession" financing) Chapter 7 is more likely.

The creditors have most of the decision making power. So the senior most debt guys will usually make sure that they get taken care of and don't really give a flying f*ck about anyone else.

Gibson is pulling in revenues of something north of $1.5B/year. A 5% cash flow margin (which is pretty low) would be $75 million per year. Gibson's senior lenders are owed at least $145 million. The bonds are $375 million (or something like that). The company might have $400 million of receivables and another $300 million of inventory. If those two key assets were liquidated, they might get 60-80% on the receivables (funny how when a company goes bankrupt many people think it means they don't have to pay them what they owe them) and probably 25-50% on the inventory. So, the liquidation of the company probably won't make the debt holders whole. The big wild card is who would buy the inventory? That said, the argument can be made that the company (cleaned up through the bankruptcy process) could be worth $500 million. If you give that ownership to the debt guys and put a new debt load of say $200 million (total) on the company, the debt guys come out smelling like a rose.

Short answer, there is virtually no way in hell that Gibson goes into liquidation. I doubt it will even get close to Ch11.

 

[rcole_sooner]

We used to have these stores around when I was growing up.

 

[electric head]

He will put his picture on every headstock....

 

[SWeAT hOg]

I remember my grandparents' drinking Gibson's.

 

[chasenblues]

 

[pnuggett]

Henry Gibson

 

[Kezia]

So yeah, called up Henry today and we struck a deal. Never thought a $25 Applebee's gift card would ever take me this far.

Anyways, we're selling all existing IP to Fender to rid of us excess baggage while we pivot into candlemaking and hand-crafted jewelry.

 

[Jymbopalyse]

Can I license the tie dye shirts ?


I have WalMart gift cards from MLP to invest.

 

[danohat]

I'm buying Guitar Center and selling nothing but ARs.

 

[Marshall & Moonshine]

See if Henry left his journal in the desk. Looking for specifically for a page that reads “100 years of tradition sure makes great toilet paper!”