Dwindling sales, mounting debt.
Remington, America’s oldest gun manufacturer, has filed for bankruptcy protection due to declining sales and mounting debt from Sandy Hook lawsuits.
From The New York Times:
The gun maker had said last month it was nearing a bankruptcy filing, which it made on Sunday in federal bankruptcy court in Delaware. In its Chapter 11 filing, Remington said it had between $100 million and $500 million in debt and would continue to operate while under bankruptcy protection. It estimated that its assets were between $100 million and $500 million.
Remington did not immediately respond to a request for comment on Sunday evening.
The company, which was founded in upstate New York in 1816 but is now based in North Carolina, was acquired in 2007 by the private equity firm Cerberus Capital Management for $118 million. The firm rolled it up with other gun manufacturers, including the maker of the Bushmaster rifle, into a conglomerate called Freedom Group.
Under that management, gun sales expanded as Remington almost tripled its production.
But after Adam Lanza killed 20 children at Sandy Hook Elementary School, the public put its attention on Remington when it was disclosed that Lanza used a Remington AR-15.
The families affected by the massacre sued Remington claiming the manufacturer bore some responsibility for Lanza’s actions.
The debt has been a problem since 2010. CNBC reported:
Adding to Remington’s problems are heavy debt, as well as product liability concerns involving its signature product, the Model 700 bolt-action rifle, which CNBC first investigated in 2010.
While Remington maintains that the guns are safe, the company has agreed to replace the triggers on millions of guns in a class action settlement. The company has refused to say whether the bankruptcy filing — which it first signaled last month — will affect the settlement.
Remington and other gun manufacturers expected a bump in sales if failed Democrat presidential candidate Hillary Clinton won in November 2016. But with President Donald Trump’s win, sales have gone down across the board.
From USA Today:
He [Remington CFO Stephen Jackson] said the “overall business and industry environments continue to cause significant financial hardship,” a situation that could be partly attributed to the perception that President Trump, a National Rifle Association supporter, won’t impose new restrictions on gun sales.
There are no official federal statistics covering gun sales nationwide.
However, statistics from the FBI’s National Instant Background Check System (NICS) show that the total of all types of background checks fell nearly 8.4%, to roughly 25.2 million, in 2017, the year of Trump’s presidential inauguration.
Firearms background checks increased steadily during much of President Barack Obama’s two-term White House tenure, as well as during President George W. Bush’s second White House term, the data show.
The company will continue operations as it pursues the bankruptcy protection.
Remington explained the bankruptcy plans “would be pre-packaged under an agreement with its lenders.”DONATE
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