America’s oldest gun-maker Remington files for bankruptcy

USA gun maker Remington Outdoor Company has filed for bankruptcy protection, after years of falling sales and lawsuits tied to the Sandy Hook Elementary School massacre.

WASHINGTON-US gunmaker Remington filed for bankruptcy on Sunday, as the more than 200-year-old firearms manufacturer vies to restructure its massive debts.

The filing was not entirely a surprise.

Reuters reported that Remington has obtained commitments for almost $300 million from its existing lenders, after new sources of funding dried up in the months leading up to its Chapter 11 filing.

Concerns about rising gun violence, mass shootings and accidents have prompted litigation, some of it including Remington.

According to a recent study by Harvard University and Northeastern University, the number of privately-owned guns in America grew by more than 70 million – to approximately 265 million – between 1994 and 2015. It is now majority-owned by Cerberus Capital Management, a private-equity group that intends to sell off the gun maker’s assets once the bankruptcy process is complete. They do not anticipate closing and should remain in business through the transition, but control of Remington will pass to its creditors.

Remington, which said in January it was almost out of cash, plans to tap the loans from the banks to help pay corporate expenses, including payroll, during its bankruptcy filing.

Remington’s woes reflect a sharp change in the gun industry over the past year.

One Las Vegas gun store even advertised a “pre-Hillary” sale.

There are no official federal statistics covering gun sales nationwide.

Remington’s sales plunged 27 percent in the first nine months of 2017, resulting in a $28 million operating loss.

The company still produces guns at a sprawling brick factory in Illion, New York, that has existed since the mid-1800s. Trump has since doubled down on a proposal to help arm schoolteachers. Remington, which makes weapons for military, law enforcement, and hunting customers, had already outlined a plan on February 12 to file for bankruptcy and give control to lenders including Franklin Resources Inc. and JPMorgan Asset Management.

Remington was cleared of any wrongdoing in the tragedy. In response, many companies and retailers have stepped up their efforts to restrict firearms sales.

Bloomberg via Getty Images A man holds a Bushmaster AR-15 Model A2 semi-automatic assault rifle at the Rocky Mountain Gun Show in Sandy, Utah, on January 5, 2013. Delta Air Lines ended a travel discount for NRA members – which prompted a backlash by gun owners, and Georgia lawmakers to revoke tax breaks for the Atlanta-based airline.

Smaller banks Regions Financial Corporation (RF.N), BB&T Corp (BBT.N), Synovus Financial Corp (SNV.N) and Fifth Third Bancorp (FITB.O) have also committed to help fund Remington’s bankruptcy loans, court documents show.

The gun manufacturer that made the AR-15 assault rifle used in the Sandy Hook Elementary School massacre has filed for bankruptcy protection. “What often happens with cases like this is both parties will agree to let the case go forward and let the Supreme Court decide the issue”. Remington has also been sued by individuals claiming some guns are defective, and voluntarily recalled some of its models. So when Trump got elected, these “panic sales”, as ABC News calls them, took a dive.

Since the election of United States president Donald Trump, gun manufacturers have seen their business decline as fears among more conservative Americans of more restrictive gun-ownership laws under a Democratic president have subsided. So far, their business has not been enough to make up for the industry’s woes. The Italian company Beretta has been making guns since 1526.