What better company than Gibson Brands Inc., manufacturer of the legendary Les Paul guitar, to play a somber tune in an ode to law firms looking at unpaid bills?
Gibson Brands filed for bankruptcy Monday in Delaware as part of a restructuring deal that will see lenders take control of the iconic maker of guitars, pianos and other musical instruments. According to a list of Gibson Brands’ 30 largest unsecured creditors, the debtor owes $139,144 to White & Case, a firm that has done some restructuring work for the Nashville-based company.
Goodwin Procter and Pepper Hamilton are advising Gibson Brands in its Chapter 11 case. Neither firm has yet filed billing statements with the bankruptcy court. The financial collapse of the company, which was founded in 1894 and is currently owned by executives Henry Juszkiewicz and David Berryman, comes after a failed attempt to expand into other business lines and a continued decline in the annual sales of guitars. In court papers, Gibson Brands lists up to $500 million in debt.
Paul, Weiss, Rifkind, Wharton & Garrison is advising an ad hoc group of noteholders supporting Gibson Brands’ restructuring plan. According to news reports, Silver Point Capital LP, Melody Capital Partners LP and funds affiliated with an investment advisory unit of buyout giant KKR & Co. LP are the stakeholders poised to take control of Gibson Brands, which hopes to conclude its bankruptcy proceedings by September.
Gibson Brands, whose general counsel is Bruce Mitchell, joins a string of struggling companies that have filed for bankruptcy in recent months and left firms of all sizes holding out hope for delinquent bills to disappear. Within the past few weeks, several more companies have slipped into insolvency and created a procession of unpaid attorneys.
In late March, just after The Weinstein Co. Holdings LLC left a trail of Big Law creditors in its bankruptcy wake in Delaware, the oldest U.S. gun-maker also sought Chapter 11 protection in the First State.
Remington Outdoor Co. Inc. is once again being advised by lawyers from Milbank, Tweed, Hadley & McCloy and Lowenstein Sandler, as well as national bankruptcy boutique Pachulski Stang Ziehl & Jones. Chicago’s Swanson, Martin & Bell is representing Madison, North Carolina-based Remington, formerly known as Freedom Group Inc., in litigation with families of the 26 people killed by Adam Lanza in the horrific December 2014 mass shooting in Sandy Hook, Connecticut. On a tally of Remington’s 30 largest unsecured creditors, Swanson Martin is listed as being owed $387,023.30.
Philadelphia-based Zitner Candy Corp., known for its chocolate-covered Easter eggs and other delicious treats, filed for bankruptcy in its home city in late April, owing $486,000 to local personal injury lawyer Kenneth Schuster; $24,670.75 to Duane Morris Government Strategies; and $3,267.95 to Duane Morris itself, according to court filings. Schuster and fellow local lawyer Evan Prochniak bought Zitner back in 2010, but Prochniak and his wife filed for personal bankruptcy last month.
Solar mounting systems maker Schletter Inc., advised by Moore & Van Allen, filed for bankruptcy last week, listing a $429,114.94 debt to Orrick, Herrington & Sutcliffe in its Chapter 11 case in Shelby, North Carolina. Englewood, Colorado-based Tempus Aircraft Sales and Service LLC also filed for bankruptcy last week in Denver. The company states in court records that it owes $81,535.12 to Chicago aviation litigator Fred Begy III, who once practiced at a Locke Lord predecessor firm before flying out on his own.
Houston-based Erin Energy Corp., an oil and gas producer that focuses its investments on sub-Saharan Africa, filed for bankruptcy last week in its home city. The company owes $530,860.22 to Baker Botts; $180,600.59 to Norton Rose Fulbright; $115,618.48 to Jackson Walker; $62,230.90 to The Loev Law Firm in Bellaire, Texas; and $23,959.99 to Houston’s Looper Goodwine, according to court records. The Love Law Firm is counseling Erin Energy in its Chapter 11 case, along with Houston’s Okin & Adams.
Elsewhere in Texas, the Brain Energy Institute, a controversial business formerly known as Cerebrum Health Centers and Carrick Brain Centers, filed for bankruptcy in Dallas in early April. In court filings, the debtor states that it owes $53,787.92 to Holland & Hart; $31,354.51 to Dallas-based Farrow-Gillespie & Heath; $18,566.62 to Dallas-based Reese Marketos; and $2,470 to Irving, Texas-based Heygood, Orr & Pearson.
The recent bankruptcy of Parkprovo LLC, owner of the Seven Peaks Waterpark in Provo, Utah, lists a debt of $46,139.25 to Salt Lake City’s Bennett, Tueller, Johnson & Deere. Holland & Hart, however, has received $75,000 from Parkprovo to advise it in Chapter 11, according to court filings.