GIBSON CREDITORS WANT NEW CEO BEFORE RESCUE DEAL:

The company is facing a $375 million bond maturity in August, and a springing lien that could cause $185 million of debt to become current in July if the bond maturity isn’t addressed by that month. Gibson’s August 2018 bonds fell as much as 2.5 cents on the dollar Tuesday to 79 cents.

Talks are underway, but there’s not yet a deal in hand or firm pricing, [Gibson Brands Inc.’s Chief Executive Officer Henry Juszkiewicz] said. “We’re really trying to get the pricing right and get the best deal.”

Juszkiewicz bought Gibson from Norlin Corp. in 1986 with two of his former Harvard Business School classmates. According to his biography on the company website, he paid his way through school playing guitar in various rock bands — a Gibson, of course.

In the late 1980s and throughout the 1990s, Juszkiewicz and his team did an excellent job of rebuilding Gibson, restoring the quality and the heritage of the venerable brand after Norlin lost its way in the 1970s, issuing quirky guitars that seemed to be better press release fodder than musical instruments. However, in recent years, Gibson has returned to the Norlin-style of questionable instrument designs. In addition, Juszkiewicz’s acquisition of home and pro audio companies in recent years may have saddled the company with an enormous amount of unsustainable debt, and the bill is rapidly coming due. Check out the comments at the end of this recent Nashville Post article headlined “Gibson ‘running out of time — rapidly’” to get a sense of the damage.