Guitar Center Files for Chapter 11

Guitar Center filed on Sunday for Chapter 11 protection from creditors in the Bankruptcy Court of Virginia’s Eastern District.The move comes just 10 days after the Westlake Village musical instrument retailer revealed its reorganization plan, which aims to offload about $800 million of its $1.3 billion in debt.Guitar Center said it won’t have to close any of its 300 U.S. stores, and will continue paying vendors and employees throughout the Chapter 11 process.Under the restructuring agreement, Guitar Center will receive up to $165 million in new equity financing from current owners Ares Management Corp. in Los Angeles, hedge fund Brigade Capital Management and private equity firm Carlyle Group.The company also plans to raise $375 million of debtor-in-possession financing from lenders and noteholders and another $335 million by selling new senior secured notes.Chief Executive Ron Japinga said in a statement he expects the company will complete the restructure before the end of the calendar year.