When he joined the financial rock stars at KKR & Co., Nat Zilkha was also a literal rock star who wrote songs and put out three albums with his New York-based band, Red Rooster.

Now, 10 years after quitting his band to concentrate on his day job, Zilkha is moonlighting in the music industry again, this time helping to lead guitar maker Gibson Brands Inc. out of bankruptcy.

The company won a judge’s approval on Tuesday to exit court oversight under the ownership of KKR and other lenders who fought a months-long legal battle for control of the 124-year-old music company. If all goes according to plan, the reorganized company will debut in early November. Zilkha, KKR’s head of alternative credit, will be one of the board members.

“I feel like I have a personal relationship with the product,” Zilkha, 43, said in an interview. “This is a great a American brand that sort of lost its way. It’s almost like a responsibility to try to bring it back to what its supposed to be.”

Gibson went bankrupt in May, four years after long-time Chief Executive Officer Henry Juszkiewicz tried to relaunch the company as a “music lifestyle” company with the $135 million purchase of an audio-focused, consumer electronics unit of Koninklijke Philips NV. Gibson blamed its financial woes on the failure of that business.

Sour Notes
During restructuring talks, lenders, including KKR, pushed to remove Juszkiewicz as a condition for investing new funds. The company tried to either sell itself or recapitalize, but that effort failed and Gibson instead cut a deal with the lenders.

In bankruptcy, KKR had to fend off holdout creditors, including Blackstone Group LP’s GSO credit unit, who were pushing for a sale. KKR responded by insisting that unless it and all other senior lenders were paid in full, they intended to take ownership of Nashville-based Gibson and reorganize the company.

Last month, Gibson, KKR and GSO settled by tweaking the reorganization plan to increase recoveries for unsecured creditors. They could get as much as 10.8 percent of face value, double the maximum envisioned under earlier versions of the exit plan.

Juszkiewicz and co-owner Dave Berryman will see their equity stakes canceled. Both will get a consulting agreement that bar them from making negative comments about Gibson for three years, a lawyer for noteholders told U.S. Bankruptcy Judge Christopher Sontchi in court Tuesday.

With approval of its reorganization plan, the company can now exit bankruptcy under a new board of directors, a majority of whom will be guitar players, said Matthew Ross, the KKR director who led the private equity company’s takeover effort.

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