Gibson Brands reaches plan settlement, eyes fourth-quarter emergence

By Caroline Salls

Pittsburgh, Sept. 6 – Gibson Brands Inc. announced Thursday that all of the major stakeholders in its Chapter 11 cases have reached a global settlement regarding the company’s plan of reorganization, which has been embodied in an amended plan.

“With the global settlement in place, Gibson is on track to complete its restructuring,” chairman and chief executive officer Henry Juszkiewicz said in a company news release.

“It is because of the united efforts of all of our stakeholders and their commitment to seek resolution that we expect Gibson can emerge from Chapter 11 during the fourth quarter of this year as a stronger company, focused on its core musical instruments business with essentially no debt.”

Gibson said the amended plan reflects agreements by the company, an informal committee of secured noteholders and supporting principals Juszkiewicz and David Berryman in connection with adjustments to the restructuring support agreement to facilitate improved recoveries for unsecured creditors.

In addition, GSO Capital Partners LP, Koninklijke Philips NV and the committee have committed to support confirmation of the amended plan.

The amended plan also suspends discovery and litigation over the plan and some claims, settles threatened litigation against GSO, the supporting principals and others and provides an agreement for allowance and treatment of GSO’s and Koninklijke Philips’ claims against Gibson.

Specifically, general unsecured creditors will receive $4.25 million in cash, up from $2.75 million in the previous version of the plan, through a distribution trust and $4 million in profits interests, instead of litigation trust interests.

Holders of general unsecured claims against the Gibson Holdings debtor will receive 100% of profits interests not otherwise allocated under the plan.

Jamie Baird of PJT Partners, commenting in the release at the request of the secured noteholders group, said “As the future owners of Gibson Brands, we are pleased that the business has performed well throughout the restructuring. With an anticipated exit from bankruptcy less than one month away, Gibson is poised for growth on strong consumer demand, significant available liquidity and a debt-free balance sheet at emergence.”

When the plan takes effect, Gibson said Juszkiewicz will step down from his position as CEO and assume the role of consultant to the company. Effective Thursday, Brian Fox of Alvarez and Marsal, who has been working with Gibson since August 2017 and has served as chief restructuring officer, will oversee Gibson’s daily operations until a CEO successor is appointed.

The company also said it will send new ballots to and extend the voting deadline for holders of claims in plan classes six and eight only.

Gibson Brands is a Nashville-based maker of musical instruments and consumer and professional audio. The company filed bankruptcy on May 1 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 case number 18-11025.

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