Gibson Brands Close To Chapter 11, New A$60M Legal Action Revealed
Gibson Brands is close to bankruptcy, with the current maker of Onkyo, Philips and Pioneer products as well as Gibson musical instruments admitting that “things look grim”.
Gibson owner and Chief Executive Henry Juszkiewicz acknowledged in an interview with the New York Times that the company could file for bankruptcy.
In another problem for Gibson Brands German Company Tronical GmbH, a maker of auto tuners for guitars, said that it is suing the US Company for $50Million.
Tronical claims that it is owed unpaid licensing fees as well as payments Gibson agreed to make for research and development until 2026.
“We believe that Tronical’s claims are without merit and intend to vigorously defend against such claims,” a spokesman for Gibson said.
Currently Gibson is trying to refinance A$500 million in bonds which are due Aug. 1.
Gibson said in a statement that it paid Tronical over $13.5 million to develop auto tuners exclusively for the guitar maker, but Tronical has been unable to account for how the money was spent or to fulfill its obligations under the contract.
The Wall Street Journal said that trouble has been brewing betweenthe two companies since 2014 when Tronical complained to Gibsonabout payment delays, according to court documents.
Gibson called Tronical’s latest statement about increasing damages in the lawsuit to $50 million a “public relations stunt” claiming that it would continue to pursue its “significant” legal claims against Tronical in the U.S.