US gunmaker Remington files for bankruptcy

(Reuters) - Remington Outdoor Co Inc [FREDM.UL], one of the largest U.S. makers of firearms, filed for bankruptcy protection on Sunday 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.

Remington, America’s oldest gunmaker, announced in February 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, according to court papers.

The 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.

The massacre led to huge U.S. anti-gun rallies by hundreds of thousands of young Americans on Saturday.

In some of the biggest U.S. youth demonstrations for decades, protesters called on lawmakers and President Donald Trump to confront the issue. Voter registration activists fanned out in the crowds, signing up thousands of the nation’s newest voters.

Major U.S. companies and retailers have taken some steps to restrict firearm sales.

21 PHOTOS
Protests against gun violence following Florida school shooting
See Gallery
Protests against gun violence following Florida school shooting
Students who walked out of their Montgomery County, Maryland, schools protest against gun violence in front of the White House in Washington, U.S., February 21, 2018. REUTERS/Kevin Lamarque TPX IMAGES OF THE DAY
Protestors rally outside the Capitol urging Florida lawmakers to reform gun laws, in the wake of last week's mass shooting at Marjory Stoneman Douglas High School, in Tallahassee, Florida, U.S., February 21, 2018. REUTERS/Colin Hackley TPX IMAGES OF THE DAY
Students from South Plantation High School carrying placards and shouting slogans walk on the street during a protest in support of the gun control, following a mass shooting at Marjory Stoneman Douglas High School, in Plantation, Florida, February 21, 2018. REUTERS/Carlos Garcia Rawlins
MARJORY STONEMAN DOUGLAS HIGH SCHOOL, PARKLAND, FLORIDA. 02/25/2018 In the background, the school building, now slated to be demolished, where 17 children and teachers were killed by lone gunman Nikolas Cruz. On February 14, 2018, a former school Stoneman Douglas student Nikolas Cruz entered the school at 2.30pm and proceeded to kill 3 teachers and 14 school children in a 7 minute shooting spree. Marjory Stoneman Douglas High School is located in Parkland, Florida, in the Miami metropolitan area. It is a part of the Broward County Public School district, and it is the only public high school in Parkland. (Photo by Giles Clarke/Getty Images)
Students from South Plantation High School carrying placards and shouting slogans walk on the street during a protest in support of the gun control, following a mass shooting at Marjory Stoneman Douglas High School, in Plantation, Florida, February 21, 2018. REUTERS/Carlos Garcia Rawlins
Melissa Conrad-Freed, former student at Marjory Stoneman Douglas High School, and Mark Forst, mourn close to the fence of Western High School during a protest in support of the gun control, in Davie, Florida, February 21, 2018. REUTERS/Carlos Garcia Rawlins
After walking out of class with hundreds of her fellow students at Walt Whitman High School in Montgomery County, Maryland, Gwen Parks holds up her hands during a protest against gun violence in front of the White House in Washington, U.S., February 21, 2018. REUTERS/Kevin Lamarque
Students from South Plantation High School carrying placards and shouting slogans walk on the street during a protest in support of the gun control, following a mass shooting at Marjory Stoneman Douglas High School, in Plantation, Florida, February 21, 2018. REUTERS/Carlos Garcia Rawlins
Students from South Plantation High School carrying placards and shouting slogans walk on the street during a protest in support of the gun control, following a mass shooting at Marjory Stoneman Douglas High School, in Plantation, Florida, February 21, 2018. REUTERS/Carlos Garcia Rawlins
A protester holds a sign at a Call To Action Against Gun Violence rally by the Interfaith Justice League and others in Delray Beach, Florida, U.S. February 19, 2018. REUTERS/Joe Skipper TPX IMAGES OF THE DAY
Students who walked out of their classes at Montgomery County, Maryland schools, protest against gun violence in front of the White House in Washington, U.S., February 21, 2018. REUTERS/Kevin Lamarque
Students who walked out of their Montgomery County, Maryland, schools protest against gun violence in front of the White House in Washington, U.S., February 21, 2018. REUTERS/Kevin Lamarque
Baltimore students outside City Hall stage a #gunsdowngradesup school walkout on Tuesday, March 6, 2018 to protest gun violence in schools and the city. (Lloyd Fox/Baltimore Sun/TNS via Getty Images)
Students from South Plantation High School carrying placards and shouting slogans walk on the street during a protest in support of the gun control, following a mass shooting at Marjory Stoneman Douglas High School, in Plantation, Florida, February 21, 2018. REUTERS/Carlos Garcia Rawlins
SOMERVILLE, MA - FEBRUARY 28: Senior Gabriel Kafka-Gibbons, left, and junior Seweryn Brzezinski, center, sit on the sidewalk during a student walkout at Somerville High School in Somerville, MA on Feb. 28, 2018. Some 200 Somerville High School students walked out at 8:17 a.m. to demand an end to gun-related violence in the wake of the attack in a Florida high school that left 17 people dead. The students exited the school as scheduled, at a time that reflects the number of staffers and students murdered Feb. 14 at a Parkland, FL, school, and then gathered outside as part of a 17-minute long silent protest. (Photo by Craig F. Walker/The Boston Globe via Getty Images)
WASHINGTON, Feb. 21, 2018 -- Students from Washington local high schools demonstrate for stricter gun control outside the White House in Washington D.C., the United States, on Feb. 21, 2018. U.S. President Donald Trump said Tuesday that he has recommended that 'bump stocks', devices that enable semi-automatic weapons to fire hundreds of rounds per minute, be banned, while debates on gun rights continue across the country. (Xinhua/Ting Shen via Getty Images)
MARJORY STONEMAN DOUGLAS HIGH SCHOOL, PARKLAND, FLORIDA. 02/25/2018 A young school child holds a sign 'Protect Children NOT Guns' at Stoneman Douglas High School. On February 14, 2018, a former school Stoneman Douglas student Nikolas Cruz entered the school at 2.30pm and proceeded to kill 3 teachers and 14 school children in a 7 minute shooting spree. Marjory Stoneman Douglas High School is located in Parkland, Florida, in the Miami metropolitan area. It is a part of the Broward County Public School district, and it is the only public high school in Parkland. Photo by Giles Clarke/Getty Images
Rabbi Jack Romberg speaks at a rally during which several thousand protestors urge Florida lawmakers to reform gun laws outside the Capitol, in the wake of last week's mass shooting at Marjory Stoneman Douglas High School, in Tallahassee, Florida, U.S., February 21, 2018. REUTERS/Colin Hackley
Protestors rally outside the Capitol urging Florida lawmakers to reform gun laws, in the wake of last week's mass shooting at Marjory Stoneman Douglas High School, in Tallahassee, Florida, U.S., February 21, 2018. REUTERS/Colin Hackley
Protestors rally outside the Capitol urging Florida lawmakers to reform gun laws, in the wake of last week's mass shooting at Marjory Stoneman Douglas High School, in Tallahassee, Florida, U.S., February 21, 2018. REUTERS/Colin Hackley
Protestors rally outside the Capitol urging Florida lawmakers to reform gun laws, in the wake of last week's mass shooting at Marjory Stoneman Douglas High School, in Tallahassee, Florida, U.S., February 21, 2018. REUTERS/Colin Hackley
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Citigroup Inc 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 also said it was restricting sales for buyers under 21, a move adopted by other large retailers, while Kroger Co’s superstore chain Fred Meyer said it will stop selling firearms entirely.

CERBERUS TO LOSE OWNERSHIP

Cerberus Capital Management LP, the private equity firm that controls Remington, will lose ownership in the bankruptcy.

Remington’s creditors, which sources told Reuters include Franklin Templeton Investments and JPMorgan Asset Management, will exchange their debt holdings for Remington equity.

The creditors inked the debt-cutting deal prior to the Parkland shooting, and it is unclear if any have exited. The restructuring support agreement allows creditors to sell their holdings, but the buyer is bound by the deal.

One investor told IFR, a Thomson Reuters news provider, that 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.

“We bowed out because we were uncomfortable,” he said.

After a Remington Bushmaster rifle was used in the Sandy Hook elementary school shooting in Connecticut in 2012 that killed 20 children and six adults, Cerberus tried unsuccessfully to sell Remington, then known as Freedom Group.

Katie-Mesner Hage, an attorney representing Sandy Hook families in a lawsuit against Remington, said in a prepared statement that she did not expect the gunmaker’s bankruptcy would affect their case.

Remington and other gunmakers have suffered from slumping sales in the past year as fears of stricter gun laws have faded.

The chief executive of American Outdoor Brands Corp, maker of the Smith & Wesson gun used in the Parkland shooting, said on March 1 that some gun retailers reported increased sales after the Florida school shooting.

Remington filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.

Reporting by Tom Hals in Wilmington, Delaware, Jessica DiNapoli in New York and Ismail Shakil in Bengaluru; Editing by Lisa Shumaker and Gopakumar Warrier

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.