November 13, 2020 I
Guitar Center Said to Prep Bankruptcy with Creditor Support
According to Bloomberg News, Guitar Center Inc. is finalizing terms of a bankruptcy with support from the majority of its creditors.
Bloomberg reported that sources with knowledge of the plan said the company could file for Chapter 11 bankruptcy as soon as this weekend with a pre-packaged plan. Stores would stay open and operate during the reorganization.
The news follows weeks of negotiations between Guitar Center and its creditors, and some investors could provide new capital to the company to help it restructure, according to those sources, who asked not to be named by Bloomberg because discussions are private.
Guitar Center would cut its debt by letting some creditors swap their holdings for a percentage of ownership in the reorganized equity, the sources said. That said, Bloomberg reported that the situation remains fluid and could change.