The Remington Arms bankruptcy sale was a success and Judge Jessup approves it. Here's the lowdown on the auction that happened.
Remington Arms Bankruptcy in Hindsight
The Remington Arms Co. filed for bankruptcy for the second time in three years this past July.
Now, a bankruptcy judge has approved the sale of Remington’s various businesses to seven bidders.
Remington filed for Chapter 11 bankruptcy protection in federal court in Alabama on July 27.
On September 29, a hearing was held to approve the results of its auction.
U.S. Bankruptcy Court Judge Clifton R. Jessup Jr. approved the sales of Remington’s businesses:
- Vista Outdoor Inc. was the successful bidder for the Lonoke ammunitions business.
- Sierra Bullets LLC was the successful bidder for the Barnes ammunition business.
- Sturm, Ruger & Co. was the successful bidder for the Marlin firearms business.
- JJE Capital Holdings LLC was the successful bidder for the DPMS, H&R, Stormlake, AAC and Parker brands.
- Franklin Armory Holdings Inc. was the successful bidder for the Bushmaster brand and certain related assets.
- Sportsman’s Warehouse Inc. was the successful bidder for the Tapco brand.
- Roundhill Group LLC was the successful bidder for the non-Marlin Firearms business.
Remington's Financial Troubles
The sales will bring in $155 million to be applied to Remington’s debt, which was estimated at $950 million heading into their 2018 bankruptcy filing.
The company was able to shed $775 million in debt three years ago.
As part of its auction process, Remington actively marketed for sale its facility in Huntsville, Alabama, which is estimated to be worth $60-70 million.
Despite its efforts, Remington did not receive acceptable bids for the facility.
Remington did accept bids to sell its manufacturing and related equipment located at the Huntsville facility.
Remington’s troubles do not reflect on the firearms industry as a whole.
Rather, the 204-year-old company has struggled due to poor management and recent legal fees.
In 2007, Remington was acquired by Cerberus Capital Management, and sales surged.
However, in 2012, the Sandy Hook Elementary School shooting in Connecticut prompted lawsuits from the families of those killed.
Remington manufactured the Bushmaster rifle used in the shooting.
In 2019, the Supreme Court ruled that the company was liable for the victims’ deaths and could be sued.
Remington took on debt from legal fees as well as from buying out investors who wished to distance themselves from the company.
The 2018 shooting at Parkland High School in Florida further alienated investors.
Remington at Present
Remington had previously been in talks to sell to the Navajo Nation, but that deal fell through.
Now, workers at their sites in Alabama, Arkansas, New York, and North Carolina wait to hear if they will still have jobs.
Remington employees in Ilion, NY are continuing to make firearms.
There are an estimated 270,000 orders to be filled.
Remington has supplied firearms for U.S. forces in every war since the 1800’s.
The company was founded in Ilion in 1816, making it the oldest U.S. gun manufacturer.
Remington’s sales in 2019 were $437.5 million, roughly half of its 2016 revenues.
The election of Donald Trump in 2016 eased fears that stricter gun control measures would be passed, and the overall demand for firearms fell.
In 2020, amid the Coronavirus pandemic, civil unrest and rioting, and economic troubles, demand for guns and ammunition have skyrocketed.
The pandemic has caused there to be disruptions in the supply chains for materials, leading to increased backorders.
The closing of Remington facilities would mean that thousands of families would be affected by layoffs.
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