U.S.A. –-(AmmoLand.com)- In a not-too-surprising move, Remington Arms has filed for Chapter 11 bankruptcy protection for the second time in just over two years, the first time having been back in March 2018.
The announcement comes just over a month after reports surfaced about Remington being in “advanced talks” with the Navajo Nation about a potential purchase that was reported by the Wall Street Journal and New York Post. The latter newspaper reported back on June 26 that Remington was, at that time, preparing for the Chapter 11 filing.
But only days ago, the WSJ reported that Remington’s discussions with the Navajo Nation over the possible bankruptcy sale “have fallen through, leaving the company still searching for a buyer and struggling with debt, people familiar with the matter said.”
Remington is one of the iconic names in American firearms, having been founded by Eliphalet Remington II in 1816 in Upstate New York. It is also the oldest firearms company in the country. It became a giant in the firearms industry, competing with other well-known names including Winchester and Browning, Savage and Mossberg, Marlin, and more recently Sturm, Ruger.
As noted by Fox Business, the legendary company is “weighed down by more debt than it can repay even as fearful Americans buy more guns than ever.”
“Remington, which supplies weapons for hunting, shooting sports, law enforcement and the military, sought chapter 11 protection and will try to sell its business at a time when civil unrest and worries about personal safety have driven firearm sales to record highs,” Fox Business added.
The company made its filing, according to CNN Business, in the US Bankruptcy Court of the Northern District of Alabama in Decatur.
While Remington has enjoyed legendary status among hunters and target shooters and saw its firearms used by law enforcement and the military over the years, it has not all been roses. The company has been the target of legal actions, with lawsuits alleging problems with the iconic Model 700 bolt-action rifle. While the company has insisted there were no design defects, it did agree in 2014 in a class-action settlement to “replace the firing mechanisms on millions of firearms, including the Model 700 and a dozen other guns with similar designs, free of charge,” as reported by CNBC in early June of this year.
And there was the lawsuit filed against Remington by the families of Sandy Hook Elementary School victims because it owns Bushmaster, which produced the semi-auto rifle used by mass killer Adam Lanza, who took his own life as police arrived at the Newtown, Connecticut school.
According to the Fox Business report, “Despite shedding roughly $775 million in debt in 2018, the company has struggled with high-interest costs and has faced litigation related to the 2012 Sandy Hook Elementary School massacre, in which the killer used a Bushmaster rifle manufactured by Remington.”
The rifle had been legally purchased by Lanza’s mother, whom he murdered before taking that and other firearms she owned legally under Connecticut law at the time.
Yet, despite the legal troubles, Remington has been one of the storied names in American firearms, and it could easily be said the company’s history is part of the fabric of U.S. history. Untold millions of Remington rifles and shotguns have been used by generations of American sportsmen and women, along with shooters and hunters around the world. The company’s handguns and rifles were used on the expanding western frontier, they have seen action on the battlefield and became popular with police and sheriff’s agencies across the country.
The New York Times added some interesting perspective Tuesday when it reported that “a slump in gun sales is not what drove Remington to file for bankruptcy, said Adam Winkler, a professor at the U.C.L.A. School of Law who specializes in gun policy.”
“Remington’s problem is mostly a problem of Remington mismanagement and not a reflection of larger trends in the gun world,” Winkler told the Times. “I don’t think we’re going to see a whole bunch of gun companies going under now.”
The NY Times asserted the company’s “troubles date back more than a decade to 2007 when the company was acquired by the private equity firm Cerberus Capital Management.”
To fight the legal battle erupting from the Sandy Hook tragedy, the company “took on debt, both from paying hefty legal fees and from buying out investors who wanted to divest after a wave of negative public sentiment toward the company,” the Times reported.
Following its 2018 Chapter 11 filing, which allowed the company to rid itself from much of the $950 million reported debt, the Times recalled, “Ownership of Remington transferred when it exited bankruptcy to some of its former creditors, including Franklin Templeton Investments and JPMorgan Asset Management. The firearms manufacturer continued to struggle to pay legal fees and the high-interest payments on its debt, leading the company to a second filing on Monday.”
About Dave Workman