Remington Files for Chapter 11 Bankruptcy & Protections… AGAIN…
Adam Scepaniak 06.29.20
In the last 2 decades we have seen Remington Outdoor Company acquire many other manufacturers – Bushmaster, DPMS, AAC, and Marlin to name a few – to burgeon themselves to a one-stop-shop, powerhouse in the firearms community. As a result of this aggressive expansion and growth they have experienced some expected growing pains. Most notably when they filed for Chapter 11 Bankruptcy Protection in 2018 and once again as they prepare for Chapter 11 to potentially have all of their assets sold.
The Wall Street Journal was the first media outlet to report on this last Friday, and although no names have been named, according to the Wall Street Journal “people familiar with the matter said” that Remington is preparing for Chapter 11 protection and to sell to the Navajo Nation (the perceived lead bidder at this time). The Navajo Nation is comprised of roughly 175,000 members throughout the states of Utah, Arizona, and New Mexico. Optimistic estimates, again from “people familiar with the matter,” state that the Navajo Nation could have a bid for all of Remington’s assets as early as Friday, July 3rd. This is not a finalized transaction you can put a bow on by any means though. There could still be competing offers from numerous unidentified players at this point and there still needs to be bankruptcy-court approval.
It is estimated that the 1st time Remington Outdoor Company went through Chapter 11 Bankruptcy Protection in 2018 that they cut $775 Million in debt. Despite that they have been quagmired in more debt from litigation surrounding the 2012 Sandy Hook school shooting lawsuit, high interest costs, operational mishandling, and sometimes questionable guiding of their brands.
In this chaotic year of quarantine and a presidential election, Remington Outdoor Company openly chose to not produce modern sporting rifles through their household name brands of DPMS and Bushmaster. Simultaneously, competing companies like Smith & Wesson are seeing record-breaking sales for AR-15s and simply cannot meet demand. It seems like they blatantly shot themselves in the foot to not produce economical and profitable rifles like the DPMS Oracle which could have prevented the need for bankruptcy yet again.
Once the dust settles if Remington Outdoor Company does sell to the Navajo Nation or another unidentified bidder, the winning bidder would be free from all previous litigation (like the 2012 Sandy Hook school shooting lawsuit) which would be very advantageous moving forward. The real question here is what do you think? Should Remington have been producing modern sporting rifles all this year and would that have saved them? Or, do you potentially see this as a positive where a new owner or group could take Remington Outdoor Company in a better direction? Let us know all of your thoughts in the Comments below! We always appreciate your feedback.
