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https://finance.yahoo.com/news/gibson-rescuer-kkr-seeks-payout-191610802.html

My post in that thread in response to uncertainty and such:

"Over a long period of time Gibson sold bonds in order to raise capital. You sell bonds by taking a million and promising 1.2 million one year from now. Bonds are good for private equity, not shareholders, they don't sell stock. But they are bad when you don't honor them.

Gibson didn't honor them, time and time again they did not make targeted returns to the bondholders. KKR is the bondholders. They took over the company by pushing out the top end(while retaining them in "consultancy", another ugly thing), and took ownership for only one reason, to get their bonds made whole.

They don't want to own a guitar company, they just want their money. A way to untangle themselves from the guitar industry plus whatever weirdness goes along with Gibson, is to sell the debt to other investment types that are interested in owning a guitar company.

Gibson has squat to say about it. The new boss may just be worse than the old boss, and the new boss will now own the previous debt plus a premium because the future is allegedly so rosy for Gibson. But the bondholders are taking almost all of the sale of debt to repay themselves, and they are no doubt happy about it, especially if it works out for them."


rct

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Never been a huge fan of KKR.  They were very instrumental in popularizing the leveraged buyout using junk bonds to fund large purchases of big conglomerates that were successful because of their diversity (ie Beatrice Foods).  Then KKR would break up the conglomerate and  sell off companies destroying what had taken decades to build up.  It was this sort of investing and divesting along with computerized day trading that redefined stock values.  Company stocks, in the old days, used to be valued on a company's balance sheet and potential earnings.  Researchers would actually visit a company's headquarters, interview the principles, inquire as to their strategies and plan for line of succession.  Now we have crap like bitcoin.  KKRs strategy may work out well for them, but not so much for the stockholders in the companies they buy and sell.    

Edited by Twang Gang
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Yes, KKR works on behalf of the bondholders.  Their sole function is to make the bondholders whole.  At this point there isn't anyone sitting around plotting great guitars and making fabulous Les Pauls.  They just want their money and you can't blame them.  Henry wanted, and got, his.  

rct

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I just read Henry J is launching (like it’s a rocket ship or space craft) a health care company in Nashville. Lord help those poor people.

I saw it on the net. It could be fake but I don’t think so.

https://www.bizjournals.com/nashville/news/2020/10/22/former-gibson-ceo-juszkiewicz-launches-caremoat.html

 

 

Edited by Sgt. Pepper
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2 minutes ago, Sgt. Pepper said:

I just read Henry J is launching (like it’s a rocket ship or space craft) a health care company in Nashville. Lord help those poor people.

I saw it on the net. It could be fake but I don’t think so.

If its true. Its like any other insurance company.  They will take your money and give nothing in return.   

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9 minutes ago, slimt said:

If its true. Its like any other insurance company.  They will take your money and give nothing in return.   

That is what he did with the prior company he was CEO of.

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47 minutes ago, Sgt. Pepper said:

I just read Henry J is launching (like it’s a rocket ship or space craft) a health care company in Nashville.

This may bode well for all of us. If he brings his business sense to the healthcare industry, the entire industry could collapse.

 

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I thought Henrey J saved the company and then made great gits for a while, bought the company for 5 mil didnt he ? ( and partners ) I thought that era gits were great.

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37 minutes ago, jvi said:

I thought Henrey J saved the company and then made great gits for a while, bought the company for 5 mil didnt he ? ( and partners ) I thought that era gits were great.

And then he didn't and if he was so great he would still be CEO. He did save Gibson and then extended his hand and instead of just concentrating on making great guitars had to delve into to may business ventures and I think borrowed way too much money that the company could not pay back. Then they file for bankruptcy and ousted him and now as you know JC, a Canadian is in charge, or maybe just a figure head.

Edited by Sgt. Pepper
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4 hours ago, Sgt. Pepper said:

...Then they file for bankruptcy and ousted him...

Nope.  A condition of the filing was that he and several top end folks be retained as consultants.   Only two disclosures, him for 2 mil a year for minimum 2 years, second in command at 1 mil a year for two years, the rest not disclosed.

rct

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4 minutes ago, rct said:

Nope.  A condition of the filing was that he and several top end folks be retained as consultants.   Only two disclosures, him for 2 mil a year for minimum 2 years, second in command at 1 mil a year for two years, the rest not disclosed.

rct

I wish that would happen to me. 

So they retain the guy and pay him when he ran the company into the ground. That is some military logic there.

It’s been over 2 years I think . . .  so thanks for the memories.

Edited by Sgt. Pepper
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2 hours ago, Sgt. Pepper said:

So they retain the guy and pay him when he ran the company into the ground. 

It was actually him making that a condition to be met before he would turn it over to the bankruptcy court and the bondholders.  They didn't retain him at all, he used a crow bar and some grease to set up himself and a couple buds.

rct

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1 minute ago, rct said:

It was actually him making that a condition to be met before he would turn it over to the bankruptcy court and the bondholders.  They didn't retain him at all, he used a crow bar and some grease to set up himself and a couple buds.

rct

Makes me glad I no longer own any.

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