by Dr. Eowyn
The screws are tightening.
Among the array of tools deployed by gun control advocates is an indirect method of attaining gun control via putting gun manufacturers out of business.
Reuters reports that yesterday, March 25, 2018, Remington Outdoor Co Inc, America’s oldest gunmaker and one of the largest, filed for Chapter 11 bankruptcy protection in the District of Delaware Bankruptcy Court “to carry out a debt-cutting deal with creditors amid mounting public pressure for greater gun control.”
The company’s chief financial officer, Stephen Jackson, said in court papers that Remington’s sales fell significantly in the year before its bankruptcy, and that the company was having difficulty meeting requirements from its lenders.
Last month, Remington announced it would reduce its $950 million debtload in a deal that will transfer control of the company to creditors. The company plans to wrap up its bankruptcy as soon as May 3.
The bankruptcy filing comes after a Feb. 14 shooting at a Parkland, Florida high school that killed 17 and spurred an intense campaign for gun control by activists, including huge anti-gun rallies by hundreds of thousands of young Americans on Saturday, March 24, calling on lawmakers and President Donald Trump to confront the issue. Voter registration activists in the rallies fanned out in the crowds, signing up thousands of new voters.
Remington’s creditors, which include Franklin Templeton Investments and JPMorgan Asset Management, will exchange their debt holdings for Remington equity. The restructuring support agreement allows creditors to sell their holdings, but the buyer is bound by the deal.
One investor said his firm had contemplated buying the Remington loans that will be exchanged into equity, which were offered at as low as 25 cents on the dollar, but that — presumably referring to the Parkland school shooting — “We bowed out because we were uncomfortable.”
Gun-control advocates have also adopted another new strategy — sue gun manufacturers.
Cerberus Capital Management LP, the private equity firm that controls Remington, will lose ownership in the bankruptcy. Cerberus had tried unsuccessfully to sell Remington after Sandy Hook families sued Remington because alleged lone gunman Adam Lanza allegedly had used a Remington Bushmaster rifle to kill 20 children and 6 adults at Sandy Hook Elementary School on December 14, 2012. Katie-Mesner Hage, an attorney representing Sandy Hook families in the lawsuit said in a prepared statement that she did not expect Remington’s bankruptcy would affect their case.
Since the Parkland school shooting, major U.S. companies and retailers have taken some steps to restrict firearm sales:
- Citigroup Inc (C.N) said last week it will require new retail-sector clients to sell firearms only to customers who passed background checks and to bar sales of high-capacity magazines.
- Citi and other large retailers also said they will restrict sales for buyers under 21.
- Kroger Co’s superstore chain Fred Meyer said it will stop selling firearms entirely.
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Remington and other gunmakers have suffered from slumping sales in the past year as fears of stricter gun laws have faded, now that Barack Obama is no longer President. However, the CEO of American Outdoor Brands Corp, maker of the Smith & Wesson gun allegedly used in the Parkland shooting, said on March 1 that some gun retailers had reported increased sales after the Florida school shooting.