One of America’s oldest gunmakers, Remington Arms, filed bankruptcy for the second time in just two years on Monday, according to bankruptcy documents obtained by American Military News.
A new Chapter 11 bankruptcy protection petition submitted late Monday comes amid acquisition talks as the company has struggled to pay legal fees for litigation, as well as high interest on its debts. The filing comes two years after Remington Arms filed in 2018 to eliminate $775 million out of its $950 million debt.
The new filing identifies nearly $17 million of its 35 largest creditors, while amounts for the top five creditors are not disclosed. The filing claims Remington Arms has between $100 million and $500 million in debts, and between 1,000 and 5,000 creditors.
Remington Arms’ current owners recently entered into talks with the Navajo Nation for the Native American tribe to buy out the company, but those talks fell through according to The New York Times. The development leaves the gunmaker without a bidder as it enters into its bankruptcy petition.
Remington Arms was founded in 1816 in Ilion, N.Y. by Eliphalet Remington II. The gunmaker has produced service weapons used throughout Civil War, World War I and World War II as well as popular rifles for law enforcement and civilian users.
The gunmaker has faced lawsuits in recent years following the 2012 Sandy Hook Elementary School shooting. The shooter, 20-year-old Adam Lanza shot and killed 26 people at the school in Newtown, Conn., including 20 children. Lanza used an AR-15 style rifle made by Bushmaster, a subsidiary of Remington Outdoor Company. Families of the school shooting victims began a lawsuit against Remington in 2014 and alleged the company’s marketing inspired the shooting attack.
In November 2019, the U.S. Supreme Court rejected an appeal by Remington which requested to stop the litigation and argued it should be protected under a 2005 federal law that shields most firearms manufacturers from liability when their firearms are used in a crime.
The lawsuit is one factor of Remington’s current financial state. While gun sales in the U.S. have surged in recent months, Remington said it has not been able to take advantage of the sales surge as it lacked funding to scale up production, NewYorkUpstate.com reported.
Adam Winkler, a professor at the U.C.L.A. School of Law and gun policy expert told The New York Times that Remington’s financial woes are also a result of mismanagement “and not a reflection of larger trends in the gun world.”
“I don’t think we’re going to see a whole bunch of gun companies going under now,” Winkler added.