Remington Gun Manufacturer Files For Bankruptcy
Remington Outdoor Company has declared bankruptcy. The bankruptcy filing comes a day after hundreds of thousands of Americans took to the streets to demand tougher gun laws to prevent school shootings. The protests were sparked by the mass shooting in Parkland, Florida in February that left 17 dead.
Remington has been one of America’s leading gun and ammo manufacturers for over 200 years. The company is currently owned by Cerberus Capital Management. Remington said its bankruptcy will not impact its customers, suppliers or unsecured creditors.
The company has won court approval to borrow an interim $75 million to sustain its business during its Chapter 11 bankruptcy. U.S. Bankruptcy Judge Brendan Shannon in Wilmington, Delaware approved the loan, saying, “A lack of disruption is key to preserving value.” Remington is borrowing the money from its current lenders.
Gun sales are quietly plummeting. Fears that prominent Democrats would enact tough gun control legislation was a huge sales motivator over the past decade. During the Obama administration, sales of firearms and ammunition grew from $19.1 billion in 2008 to $49.3 billion by 2015.
Gun sales got another boost in 2016 on fears that Hillary Clinton would win the presidency and enact more stringent gun restrictions. However, gun owners have little to fear in terms of gun control now that Donald Trump is president. Trump became an avid NRA supporter after it helped his campaign during the 2016 election.
Remington is not the only gun manufacturer suffering from the slump in sales. Firearms makers have been stuck with a glut of weapons since the election. American Outdoor Brands Corporation, the maker of Smith & Wesson firearms, is reporting a 32.6 percent drop in net sales year-over-year.
Remington also had a major setback after its Bushmaster AR-15 rifle was used in the Sandy Hook Elementary School mass shooting in December of 2012. Families who lost loved ones in the tragedy have been trying to hold the company liable. Remington is also embroiled in litigation over trigger defects on some of its guns. The company has moved to suspend those cases.