Remington gun manufacturer, which has been a representation of America’s gun culture for more than two centuries, announced on Monday that the company will file for bankruptcy.
The company was founded in 1816 by Eliphalet Remington II and today has more than 3,500 employees; it also is said to be almost $1 billion in debt.
Remington set to file for bankruptcy https://t.co/25TnhZehIk pic.twitter.com/hRuIskrfyg
— CBS News (@CBSNews) February 13, 2018
Remington, which was acquired by Cerberus Capital Management in 2007, says that filing Chapter 11 will allow them to keep their doors open while working with creditors to settle debt and get the company back on solid ground.
U.S. gunmaker Remington reaches a deal with creditors to file for bankruptcy to slash its $950 million debtload: https://t.co/d7hBOUgLei pic.twitter.com/DdVilSAkNn
— Reuters Top News (@Reuters) February 12, 2018
Remington, one of the largest American manufacturers of ammunition and firearms, said its business decline has been deteriorating since President Donald Trump took office, even though Trump unwaveringly supported Americans’ right to bear arms.
Private-equity tycoon Stephen Feinberg owns Cerberus Capital Management and has been a prominent supporter of President Trump.
Remington’s struggles are an example of the unstable opulence of the firearms industry and highlight the frailness of the firearms industry both politically and economically. Hillary Clinton, prior to her defeat, set fear that gun supporters might lose access to weapons if she were elected.
The gun industry ordered mass inventory at that time, but when Trump was elected, gun sales plunged and retailers stopped re-ordering. They were left with a large amount of unsold inventory. According to data from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), more than 11 million firearms were manufactured in the U.S. in 2016, up from fewer than four million a decade ago.
A report from National Opinion Research Center at the University of Chicago stated that in 2014, 31 percent of American households reported owning a firearm, down from 47 percent in 1973. “Gun ownership has become more concentrated as a result, with a small sliver of gun owners owning a growing segment of America’s firearms inventory,” according to the Harvard Injury Control Research Center.
One study, conducted by Harvard and Northeastern universities, reported that “about half the guns in America are owned by only 3 percent of the adult population, with an average of 17 firearms each.”
Remington’s Chapter 11 will be filed with the U.S. Bankruptcy Court in Delaware, according to a statement from the company.
“Holders of the gun maker’s $550 million term loan will take an 82.5 percent equity stake in Remington while third-lien noteholders get 17.5 percent of the company and four-year warrants for a 15 percent stake,” Remington said. Creditors will also provide a $100 million debtor-in-possession loan to finance operations throughout bankruptcy.