CALIFORNIA: As music lovers transferred their shopping online during the coronavirus pandemic, Guitar Center Inc the largest US retailer of musical instruments and equipment, filed Saturday for Chapter 11 bankruptcy.
The retailer has agreed to provide debtor-in-possession funding of US$375 million from its current lenders in total and expects to collect US$335 million in new senior secured bonds, the company said in a statement.
The group signed a restructuring deal earlier this month with key stakeholders, including a debt reduction of almost US$800 million and new equity contributions of up to US$165 million to recapitalize the company.
In a court filing, the firm said it has both assets and liabilities of between US$1 billion and US$10 billion.
Guitar Center, which operates almost 300 stores nationwide, said business activities will continue without interruption.
Milbank LLP acted as legal counsel, BRG acted as turnaround lawyer, and the company’s financial advisor was Houlihan Lokey.
As a store selling home organs in Hollywood, the Guitar Center opened in 1959.
In the United States Bankruptcy Court of the Eastern District of Virginia, the corporation filed for Chapter 11 bankruptcy.