Announced last month in the face of poor sales and heavy debt, Remington officially filed for Chapter 11 Bankruptcy Protection on Sunday. The filing was delayed by the Parkland shooting on Febuary 14.
As reported in the Wall Street Journal today –
Founded in 1816, Remington is one of America’s oldest and largest gun and ammunition manufacturers. The Madison, N.C., company plans to continue operations and paying its vendors and employees while under bankruptcy protection.
Additional details of the filing include –
The bankruptcy filing gives Remington the breathing space to continue operations with the help of its bankruptcy loans. The company secured a $145 million term loan from Ankura Consulting Co. LLC, and its prepetition bank lenders have agreed to extend $193 million in asset-backed loans, court papers show. Remington will use the debt to keep production going while under chapter 11 protection.
The $100 million bankruptcy term loan will be converted to an exit loan after Remington emerges from chapter 11 protection.
Major shifts in production and demand of firearms over the last two years have figured heavily in this development. In 2016, the gun industry ramped up production in anticipation of another Democrat in the White House. After Trump’s election, however, fears of gun control legislation waned and similarly gun purchases fell in 2017.
Similarly, background checks rose and fell over that time –
The FBI tallied 27,538,673 background checks in 2016, an increase of more than 4 million checks from 2015.
There were more than 2 million fewer background checks in 2017, according to the FBI data.
What remains to be seen is how much gun sales change as a result of the Parkland shooting in February and the real possibility of increased gun control legislation. The initial data shows an increase in background checks since February 14. As former NRA lobbyist Richard Feldmen told Newsweek –
“The fight that’s happening now looked like it was going to happen a year ago January,” he said. “Certainly, the discussion [about gun control] is all that’s required for the buying frenzy to be triggered.”
Here is The Gun Collective‘s take on the bankruptcy and a brief introduction to what a bankruptcy procedure typically looks like –
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