Frontier Gun Maker Remington Seeks Bankruptcy Protection

Frontier Gun Maker Remington Seeks Bankruptcy Protection
In this Jan. 15, 2013 file photo, Remington rifle cartridges are displayed at the 35th annual SHOT Show in Las Vegas. (AP Photo/Julie Jacobson, File)

Remington, a company that began making flintlock rifles when there were only 19 United States, has filed for bankruptcy protection.

Remington’s production of one of the most well-known weapons in the world, the Bushmaster AR-15, has overwhelmed the Madison, North Carolina, company.

Late Sunday, according to records from the bankruptcy court of the district of Delaware, Remington Outdoor Co. agreed to a prepackaged deal that would give holders of the company’s $550 million term loan an 82.5 percent stake, according to a release.

Third-lien noteholders will take 17.5 percent of Remington and four-year warrants get a 15 percent stake.

Remington, which has roots dating to 1816, has lined up $100 million with lenders to continue operations.

It remains unclear what will happen to the 3,500 or so employees at Remington as it reorganizes.

The Bushmaster AR-15 rifle was used in the Sandy Hook shooting in Connecticut in which 20 first-graders and six educators were killed in 2012.

The same gun was used to kill 17 in a Parkland, Florida, high school massacre.

The company was cleared of wrongdoing in the Sandy Hook shooting.

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.

But there were no takers.

In 2017, firearm background checks, a good barometer of sales, declined faster than in any year since 1998, when the FBI first began compiling that data.

But there were clear signs that gun sales, even as production increased, were already in decline. By 2015 Cold Holdings Co., another storied gun maker, had filed for Chapter 11 bankruptcy protection.

Profit growth at Sturm, Ruger & Co. is under severe pressure and the company’s shares are down 18 percent this year.

 

 

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