Legendary Guitar Maker Gibson Files For Bankruptcy

NASHVILLE, TN -- Up against a financial wall with sharply declining sales and a loans coming due, iconic Nashville-based Gibson Brands filed for bankruptcy Tuesday.

The 124-year-old maker of the iconic Les Paul solid-body electric guitar has more than $500 million in loans due in the next six months, according to a February report from the Nashville Post. Rumors of a looming bankruptcy have swirled for months amid what is regarded as the failed experiment of its Gibson Innovations unit, which supplies headphones and other electronic accessories.

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Gibson CEO Henry Juszkiewicz, who owns 36 percent of the company, said in a statement early Tuesday the vast majority — 69 percent — of the company's creditors have signed on to a restructuring agreement that will allow Gibson to "refocus" on its core mission of providing musical instruments. Part of that plan kills the Innovations unit.

In addition to Gibson Guitars, the company also manufactures instruments under the Dobro, Wurlitzer and Baldwin Pianos brands. In total, Gibson's musical instrument divisions employ 875 people in facilities in Nashville, Memphis and Bozeman, Montana.

A guitar, once owned and used by Keith Richards of the Rolling Stones, stands on display at Christie's December 10, 2004 in New York City. (Photo by Spencer Platt/Getty Images)