Tronical Suing Gibson For $50 Million.
The German company Tronical who licensed an auto tuning technology to Gibson for more than a decade filed court papers claiming Gibson owes them $50 million.
The suit comes after Gibson sued Tronical in December alleging a $2.2 million fraud against the guitar maker. Gibson’s complaint accuses Adams and Tronical of requesting pre-payments for technology and only delivering a fraction of the goods. The lawsuit also claims Tronical doubled its prices after their contract was signed.
Gibson bought the Robot Guitar in 2007 from Tronical and started making it standard on most of their guitars by 2014.
In subsequent years Gibson has reduced models using the auto tune technology. Gibson’s 2018 model lineup only has a few guitars featuring the 13 year old technology developed by Tronical. Speculation which drove Tronical to sue the guitar making in court.
Henry Juszkiewicz, CEO and majority owner of Gibson needs to refinance more than $500 million in debt , $375 million in senior notes and a bank loan due if the notes aren’t repaid. Juszkiewicz was in talks with Kohlberg Kravis Roberts over a debt for equity swap that would put the private equity titan in control of Gibson but that process has broken down.
Those talks had put the value of Gibson’s core instruments and audio equipment business at about $650 million.
Juszkiewicz plans to divest either by selling or closing down a number of the small consumer electronics brands he acquired earlier in this decade.