Published: Wed, March 28, 2018
Worldwide | By Victor Meyer

Reaction to Remington Arms Declaring for Bankruptcy

Reaction to Remington Arms Declaring for Bankruptcy

Remington Outdoor Company on Sunday filed for Chapter 11 bankruptcy in Wilmington.

Records from the bankruptcy court of the district of DE show that the company filed late Sunday.

In sum, the plan is created to reduce approximately $700 million of Remington's debt and support the contribution of $145 million of new capital into Remington's operating subsidiaries, markedly strengthening the company's consolidated liquidity, balance sheet and long-term competitiveness.

In 2015, another gunmaker, Colt Holdings Co., filed for Chapter 11 bankruptcy protection.

The company was cleared of wrongdoing in the Sandy Hook shooting, but investors wanted nothing to do with it. Cerberus Capital Management, which had acquired the company in 2007 as gun sales began to boom, tried to sell it less than a week after the shooting. One of the first gun manufacturing companies having filed for bankruptcy is ironic to say the least.

Headquartered in North Carolina, Remington dates to 1816, making it one of the nation's oldest gunmakers. The company has been fighting slumping sales for years, and although there are upticks in gun sales after every mass shooting, those bumps haven't been enough to keep them afloat.

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In bankruptcy court documents, representatives for the company said Remington ramped up its firearms production in 2016 to meet an expected increase in demand in 2017, but that never materialized.

Remington experienced a "significant decline in sales" over the past year when demand "ultimately did not materialise" after the company boosted output in 2016, Jackson said.

The bankruptcy filing comes as the firm faces a nosedive in sales - and calls for gun control spread in the wake of nationwide protests spurred by the Parkland, Florida school shooting. While this makes sense, it also appears a bit ironic for those whose income depends on selling guns and draws attention to the efficacy of fear as a mechanism to boost gun sales.

Dick's Sporting Goods announced it would stop selling assault-style weapons and high-capacity magazines following the tragedy in Parkland, Fla., and the company also stopped selling guns to anyone younger than 21.

Remington was later sued by the relatives of nine people killed and one who survived the Sandy Hook massacre, but the suit was dismissed by a state Superior Court judge. Pre-bankruptcy term loan lenders will get 82.5 percent of the new parent entity, while third lien lenders will get cash and warrants. Vista Outdoor's brands in the outdoor and cycling space include Bell, Blackburn, Bollé, Bushnell, CamelBak, Camp Chef, Giro and Jimmy Styks.

That smaller base of what are sometimes referred to as super-owners has made the industry more unstable.

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