Nation's oldest gun maker to file for bankruptcy

Matt Saintsing
February 13, 2018 - 1:28 pm

Photo Credit: Joshua Cutlip/Sipa Press

Remington, the American firearm manufacturer that can trace its roots back to 1816, said it would file for bankruptcy protection, marking an end of an era for American gun making.

First reported by Bloomberg on Monday, a deal has been struck that will give lenders ownership over the company. As America’s oldest gun maker will be turned over to creditors, it will reduce its debt by $700 million, and free up around $145 million in new capital.

Recently, Remington has been plagued by lawsuits tied to the Sandy Hook Elementary School massacre. The company has been cleared of any wrongdoing, but investors have been distancing themselves from the company’s owner, Cerberus Capital Management.

In a statement, Remington said its operations “will not be disrupted by the restructuring process.”

A reliable proxy for gun sales, firearm background checks, had been rising steadily over the last decade, but that changed last year with the election of President Donald Trump.

Gun sales typically spoke on the election of candidates who are perceived to be more likely to seek out stricter gun control laws. In this case, perception is indeed reality.

Mr. Trump was the first sitting president to address the National Rifle Association in more than 30 years, when he told attendees at an event last spring that he "was a "true friend" of the gun industry. Firearm background checks declined faster last year than in any other year, since the FBI first began compiling that data in 1998.

Gun sales surged to record levels in 2016, the last year of Barack Obama’s presidency, with fears of then-Democratic presidential candidate Hillary Clinton favoring more gun control.

Remington received its first contract in 1845 when it manufactured 5,000 “Mississippi” rifles for the U.S. military.

Colt Holding Co., another American gun maker, filed for bankruptcy in 2015.