Delayed Remington Bankruptcy Filing Has Been Completed
Privately held Remington Outdoor announced in mid-February that it had negotiated a restructuring deal with its major creditors and would file a prepackaged Chapter 11 reorganization plan. Less than 48 hours later, 17 students and faculty in Parkland, Florida, were dead following an attack on Marjory Stoneman Douglas High School by a former student using a semiautomatic assault-style rifle.
Bankruptcy papers were finally filed Sunday in the U.S. Bankruptcy Court in Delaware.
Remington was acquired by private equity firm Cerberus Capital Management in 2007 for about $370 million, including debt. The acquisition followed the firm’s 2006 acquisition of Bushmaster Firearms, the maker of the semiautomatic weapon used to kill 26 children and faculty at Sandy Hook Elementary School in December 2012.
Litigation related to that incident, along with tumbling gun sales and a crushing debt load that has climbed to more than $1 billion, led Cerberus to pass ownership of the gun maker to creditors, who will get 82.5% of the company, while third-lien holders take the rest in exchange for $100 million in debtor-in-possession financing.
When Remington announced in February that it had reached a deal with its creditors, CEO Jim Geisler said:
Since its founding over 200 years ago, Remington has been a uniquely American company and brand. Our longevity is owed to generations of loyal customers and hard-working employees who met challenges and delivered results. Difficult industry conditions make today’s agreement prudent. I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage.
Since 2009, the number of guns in private hands in the United States has exceeded the country’s population. Bloomberg has cited a research study conducted by Harvard and Northeastern universities that concluded that about half the guns in America are owned by only 3% of the adult population, with an average of 17 firearms each.