BY Richard Summerfield
Gunmaker Remington Arms has filed for Chapter 11 bankruptcy protection in the Bankruptcy Court of the Northern District of Alabama.
The company listed assets and liabilities both in the range of $100m to $500m. Remington said it had $437.5m in sales in 2019, about half what it earned in 2016. The filing is the second time in two years that the company has filed for Chapter 11 bankruptcy. In March 2018, Remington filed for bankruptcy and announced it was seeking to reduce its debt by $620m. It exited the Chapter 11 process the same year when ownership of the company transferred to some of its former creditors, including Franklin Templeton Investments and JPMorgan Asset Management.
The company’s latest filing comes after the collapse of a mooted sale. Recently, Remington had been in discussions over a possible sale to the Navajo Nation, however The Wall Street Journal, citing a person with knowledge of the situation, reported that those discussions had broken down.
Remington’s financial problems have been ongoing for some time. The firearms industry faced a public backlash after the 2012 incident at Sandy Hook Elementary school which left 20 children and six adults dead. Remington bore the brunt of the criticism after it emerged that the company had manufactured the AR-15-style rifle, the Bushmaster, used by the gunman.
The families of the Sandy Hook victims sued the company, and Remington took on debt, both from paying hefty legal fees and from buying out investors that wanted to divest after a wave of negative public sentiment toward the company. That legal battle is still ongoing and has undoubtedly had an impact on the company’s finances.
In response to the filing, the Sandy Hook families released a statement expressing concern that the company would use the bankruptcy process to escape any potential financial liability stemming from their lawsuit.
Remington’s filing comes amid a reported a spike in firearms sales in the US. Unrest has grown across the country since the death of George Floyd and the escalation of calls to defund the police.