Gibson Brands disclosure statement approval hearing pushed to July 30

By Caroline Salls

Pittsburgh, July 25 – A hearing on approval of Gibson Brands, Inc.’s disclosure statement has been adjourned to July 30, according to a notice filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The hearing was previously scheduled for July 25.

The notice did not give a reason for the postponement.

Last week, Gibson’s official committee of unsecured creditors objected to the disclosure statement calling the plan on which the statement is based “unconfirmable.”

While proposing a 0.2% recovery to general unsecured creditors and a minimal recovery to holders of convenience claims, the committee said the plan delivers a substantial recovery to equityholders and supporting noteholders.

The committee said the plan violates the absolute priority rule of the Bankruptcy Code by giving $5.45 million in cash to controlling shareholders and senior Gibson Brands officers and warrants and a share of profits to other officers.

In addition, the creditor group claims the plan illegally provides broad releases in favor of the supporting principals.

Gibson Brands is a Nashville-based maker of musical instruments and consumer and professional audio. The company filed bankruptcy on May 1 under Chapter 11 case number 18-11025.

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