One of the biggest U.S. gun manufacturers is taking steps toward filing for bankruptcy, according to Reuters news service.
Remington Outdoor Company Inc. has “reached out to banks and credit investment funds in search of financing that will allow it to file for bankruptcy,” Reuters reported Thursday evening, citing “people familiar with the matter.”
According to those sources, the debt-ridden company missed a payment on those obligations this week and is seeking “debtor-in-possession financing” that would let the company continue operations once it went bankrupt.
But that may be difficult.
According to Reuters, some credit funds and banks are balking at the move because one of the company’s guns was used in the Sandy Hook school massacre in Connecticut.
“Remington, which is controlled by buyout firm Cerberus Capital Management LP, was abandoned by some of Cerberus’ private equity fund investors after one of its Bushmaster rifles was used” in the 2012 shooting, Reuters wrote.
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Citing credit-ratings agencies, Reuters reported that “Remington’s capital structure is unsustainable given its weak operating performance and significant volatility in the demand for firearms and ammunition.”
One of the issues with Remington is that fears of gun-control legislation under President Barack Obama have receded and “stockpiling” purchases, just in case, have accordingly declined, hurting the entire gun industry.
• Victor Morton can be reached at vmorton@washingtontimes.com.
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