A few weeks ago we covered how Remington appeared to be preparing to file for Chapter 11 Bankruptcy a second time. It turns out that everything except for the buyout by Navajo Nation came to pass over the past couple of months which saw a massive spike in gun sales amid the COVID-19 pandemic and civil unrest across the United States.
Remington Files Chapter 11 for a Second Time Amid Record Firearms Sales Months
The two-century-old firearms manufacturer is among one of the most well-known brands in the nation. I myself own a Remington shotgun and it is one of my oldest and most reliable firearms. However, despite the times we are in it seems that the venerated firearms manufacturer has struggled to secure revenue for continued operations.
There were talks a few weeks ago of a possible buyout by Navajo Nation and according to the Wall Street Journal, the two entities were in “advanced talks.” It has come to light with this recent filing of Chapter 11, however, that the talks collapsed. According to the court filings by Remington somewhere between 1,000 and 5,000 creditors are listed as well as assets between $100 million and $500 million.
Remington previously filed for bankruptcy back in 2018 during what many called the “Trump Slump.” This period of time saw a slow in gun sales amid a perceived pro-gun administration. However, this time around Remington seems to have the deck stacked against it. Not only did Remington lose a potential buyer, but it has also recently been hit with a Supreme Court Ruling which awarded families of victims of the Sandy Hook Elementary School shooting to pursue lawsuits against Remington.
This series of lawsuits is only allowed because of the companies ownership of the Bushmaster brand which produced the semi-auto rifle stolen and used by Adam Lanza. These lawsuits came on the heels of Remington’s first filing for bankruptcy in which it was allowed to cast off about $775 million in debt.
Some believe that Remington’s troubles may have started as far back as 2007 when the company was acquired by the private equity firm Cerberus Captial Management. Many investors had to be bought out because of the subsequent 2012 Sandy Hook shooting which strained the relationship between Remington and its investors.
These circumstances combined with Remington’s high-interest debt and legal fees has led the company to file bankruptcy for a second time as of this week. Time will tell if this second restructuring of debts will help pull the company out of financial troubles. What are your thoughts? Will Remington fix its problems or will the company continue to flounder?