Remington Seeks Bankruptcy Protection As Gun Sales Slide

Remington Seeks Bankruptcy Protection As Gun Sales Slide

With a pre-packaged bankruptcy plan, the North Carolina-based company will reduce the debt size by some $620 million, according to filings with a DE bankruptcy court. Details of the filing were not immediately available, but in a note to investors on Friday, the company reported negative operating cash flow as of March 25 of $7.4 million.

That was when Donald Trump's surprise election victory in the United States led to a sudden drop in U.S. firearms demand, which had been, until then, high, as gun owners stockpiled in anticipation of a Hillary Clinton presidency.

But despite America's oldest gun manufacture filing for bankruptcy, Cheyenne Gun Trade says they don't expect to see any effect on their sales.

Remington's bankruptcy filing highlights the negative impact of a pro-gun president for gun manufacturers. They say haven't been buying many of their guns for years, because of how they run their business.

Remington's financial issues are also tied to the difficulty the company has had running its Huntsville, Ala., manufacturing plant that opened in 2014, the partner noted.

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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.

Remington makes the Bushmaster AR-15-style rifle that was used in the Sandy Hook shooting in CT that left 20 first-graders and six educators dead in 2012. "We went from [a] 3-million-to-6-million-unit-per-year business to 16, 17, 18 million units per year".

All of this said, firearm background checks, a loose proxy for gun sales, have remained relatively stable in recent months. That factory, which got its start producing thousands of guns for the Army, forms the economic foundation of Ilion and much of the surrounding Mohawk Valley.

Remington already outlines a plan in February to file for bankruptcy, and plans to win bankruptcy court approval of the restructuring by May 3. The company has been planning to reduce its debt by $700 million through the Chapter 11 process and contribute $145 million to its subsidiaries.

Remington's parent company Cerberus Capital was shunned by investors after its Bushmaster gun was used in the 2012 attack and has now been forced to borrow $100 million to continue operations. The company, which is based in Madison, North Carolina, has been making guns for two centuries. But on Facebook, Mohawk Valley Rep. Claudia Tenney (R-New Hartford) said she has been in contact with Remington's team and says there will be no job losses and no plans to relocate the facility at this time.

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