A.D.K. Arms Files for Chapter 11 Bankruptcy

ADK

According to court documents, A.D.K. Arms, Inc. filed for Chapter 11 bankruptcy on July 20 of this year. This filing was made at the U.S. Bankruptcy Court, Northern District of Illinois.

A.D.K. Arms sells a range of firearms products centered on the AR-10 and AR-15 platforms. It is an affiliate company of Advanced Precision Manufacturing, Inc. (APMI.) As explained in the court documents, A.D.K. Arms serves as a “go-between for customers and APMI.” In short, A.D.K. Arms takes the orders, purchases the products from APMI and then ships the parts out to customers.

In June, APMI filed for Chapter 11 bankruptcy.

According to filings made by A.D.K. Arms, the company has assets and liabilities that are both in the range of $100,001 – $500,000. APMI listed assets and liabilities that were both in the $1 million – $10 million range.

While the facts appear to be in dispute, it appears both bankruptcy filings were prompted by actions taken by Midwest Community Bank (MCB.) According to court documents APMI purportedly owes MCB about $3.9 million. Additionally, A.D.K. Arms purportedly owes more than $1.8 million.

According to the court documents, it appears that APMI and then A.D.K. Arms both filed for Chapter 11 due to the efforts of MCB to collect on those loans. A related case was filed by A.D.K. Arms on July 24 against MCB related to these activities.

So, what does all of this mean for the average shooter?

Chapter 11 bankruptcy is a legal process by which a company can reorganize its business to address its debts and continue operations. A Chapter 11 bankruptcy proceeding does not result in the ending of a business – just a restructuring of the business with the intent that it can get back on track and become profitable again. I have no information, nor am I suggesting, that A.D.K. Arms is “going out of business.”

Rather, both APMI and A.D.K. Arms have stated in court documents that there are multiple paths to exiting Chapter 11 and repaying creditors with a plan of reorganization.

While Chapter 11 is not a great position to be in, it can be used by a company to restructure and jump start the business. Chapter 11 can also be a good way for a company to seek court protection from an aggressive creditor. Personally, I wish both APMI and A.D.K. Arms good fortune during this process.



Richard Johnson

An advocate of gun proliferation zones, Richard is a long time shooter, former cop and internet entrepreneur. Among the many places he calls home is http://www.gunsholstersandgear.com/.


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  • Major Tom

    “A.D.K. Arms sells a range of firearms products centered on the AR-10 and AR-15 platforms.”

    Well there’s your problem. Trying to copycat the eleventy-billion OTHER AR accessory manufacturers instead of being innovative and broader in scope.

  • AZgunner

    Never even heard of these companies. I doubt the average shooter would be very distraught about it.

    • allannon

      At least it’s not titled BREAKING; then I’d be really confused, since it would imply this is of great general significance.

    • glenn cheney

      I know them, do business with them…they have superb armorers. Their parts I purchase are first rate, incl. their bionic .308 bolts, their enhanced firing ins (all my bots now run enhanced pins) and I love their skeletonized triggers, single stage, crisp brake, no overtravel, and my custom order heavy hammer springs.
      My AR’s eat any Rooskie ammo, no matter how hard the primers.
      Sad to see they are now DIP, Debtor In Possession…I’m wondering if both firms share common ownership, I do not know, but I go to them when I want hands laid on.
      Try that anywhere else.
      I do business with whom I can communicate. These are good people. Someone on this thread asked why they are in Illinois. They are of Polish decent, and there are many of that lineage in and around Chicago.
      I have a background in finance and am familiar with D.I.P. procedures. They should be up and running.
      No complaints from me. All my Grendels use their triggers, the rest at least enhanced pins and hammer springs. I’ll soon be needing more. We poke the piggies, and single stage is the right tool for the job. Their triggers are great for 3 gun comp. too, but, I’m pre-geeze, no run n gun…it’s no fun!

  • Raoul O’Shaughnessy

    Gambled on a Hillary win, loaded up on inventory accordingly, got caught naked when the tide went out.

    • Tim

      Yep. And I don’t mind saying that I (like a lot of other folks) have been scooping-up some *smoking* hot deals on firearms which were nigh unobtainable this time last year.

      “Thank you”, Hillary Clinton, for being such an incurably arrogant, lying, entitled, lazy, feckless, drunken b!tch.

      • HSR47

        “”Thank you”, Hillary Clinton, for being such an incurably arrogant, lying, entitled, lazy, feckless, drunken b!tch.”

        Might want to watch it with that kind of talk; lazy people and alcoholics might find consider it libelous.

  • LGonDISQUS

    I’ve said since 2015 – expect consolidation of companies to prevent the wheat being thrown away with the chaff.

    These smaller businesses are going to continue dropping in the next two-to-three years, I’m betting (bicycle industry is apexing in costs and cottage industries too. Expect boutique $300 bike shorts companies to fall to the wayside eventually.

    • 22winmag

      Under Armour is toast. Look it up.

      • LGonDISQUS

        Yah, their stocks have tanked something like 45% since that whole hunter denial stuff, along with other issues. I give them and insta girl models flexing in front of a mirror a few more years.

        • Paul Rain

          The Instagram model market is always in bull mode. The Saudi royal family are always going to need someone to shower with gold.

        • Sunshine_Shooter

          Don’t short the IG model marketplace. People will always be following their pages and certain companies will (erroneously) sponsor them thinking it will drive sales.

          • LGonDISQUS

            They all just need to flood the market as escourts, diluting high end nights to prices lower than a trip to IHOP.

      • Mystick

        Under Armour is tanking because the owner is a tool. I’ve met the guy, he frequents northern Baltimore County here. I was not impressed with his… “character”, despite his outwardly philanthropic nature. Don’t let it fool you.

  • Never even heard of this company or its products. I can think of two other IL based companies I’d be thrilled hear have filed bankruptcy.

  • Waskoley Wallaby
  • 22winmag

    Another company made irrelevant and ultimately slain by Palmetto State Armory.

    • civilianaf

      PSA? please go on…Ive heard they are a meat grinder to make parts for.

  • Mystick

    Here’s a suggestion…. GET OUT OF ILLINOIS.

    • Tim

      Yeah, no kidding. What moron decided to open firearm manufacturing in the most oppressive, gun-hating environment in the U.S.?

      • john huscio

        I wouldnt say IL is the most “oppressive”. California/NJ/NY are all worse.

  • Sunshine_Shooter

    I guess my financial legal-ese isn’t up to snuff. How can ADK list liabilities in the $100,000 – $500,000 range, but owe $1.8 million?

    Any comment section accountants that can give me a crash course?

    • Major Tom

      The balance sheet works out negative. Presumably because of several months/years of being in the red. Liabilities are counted one time on a period to period basis (typically year to year or quarter to quarter) while existing debts from previous cycles can just keep accumulating.

  • civilianaf

    I heard they sold stuff to Radical Firearms…imagine that.

    I know people who have bought parts form them, some were good, some were complete junk. Over the last few years I kept hearing their name come up, and for all the wrong reasons.