Gibson Brands Approved to Exit Bankruptcy with Lenders as Owners

KKR & Co. and other senior noteholders will swap the debt they hold for ownership of the bankrupt maker of guitars used by professionals and amateurs.

The Chapter 11 reorganization plan of Gibson Brands, Inc. will eliminate about $500 million and provide $70 million in new funding under an asset based loan facility, according to court documents. An affiliate of KKR holds $198.3 million in Gibson notes.

The reorganization plan comes after KKR, Gibson and GSO Capital Partners ended a months-long fight over a potential Gibson sale and the best way to restructure the debt.

Owners Henry Juszkiewicz and Dave ...