It’s been rough for Remington, lately. However, the company finally has a bit of good news. It’s now out of bankruptcy.
Remington, America’s oldest gunmaker, filed for bankruptcy protection in March, weeks after a shooting at a high school in Parkland, Florida killed 17 people and triggered intensified campaigns for gun control by activists.
Under the reorganization plan, inked two days before the Feb. 14 Parkland shooting, creditors including JPMorgan Chase & Co (JPM.N) and Franklin Advisors will take ownership stakes in the company in exchange for forgiving more than $775 million of debt.
Remington also received a $193 million new lending package funded by seven banks, including Bank of America Corp (BAC.N).
“It is morning in Remington country,” Chief Executive Anthony Acitelli said in a statement.
Investors in Cerberus Capital Management LP, the previous owner, had urged the private equity fund to sell Remington after its Bushmaster rifle was used in a school shooting in 2012 in Sandy Hook, Connecticut, in which 20 children died.
Remington has said its bankruptcy would not affect lawsuits against it, including one filed by the families of Sandy Hook victims. It is also appointing a new board of directors.
It should be noted, however, that while the bankruptcy doesn’t protect Remington, the Protection of Lawful Commerce in Arms Act sure as hell does.
Remington’s bankruptcy was partly triggered by a decline in gun sales as President Donald Trump’s election eased firearm enthusiasts’ worries about increased regulation.
Following the Parkland shooting, companies such as Delta Air Lines Inc (DAL.N), Dick’s Sporting Goods Inc (DKS.N) and Walmart Inc (WMT.N) cut ties with gun-rights groups or restricted sales of weapons.
Bank of America has hinted that it may sell its participation in Remington’s exit financing package.
Notice how they keep referring to these mass shootings? They have little bearing on the story being reported on. Cerberus’s comments have bearing, sure, because that directly relates to Remington’s financial woes. However, the post-Parkland cowardice by several companies has absolutely nothing to do with Remington.
Further, Parkland had nothing to do with Remington’s bankruptcy. The fact that the company filed just weeks after the shooting there is a prime example of a coincidence. If history shows us anything it’s that their sales were about to increase as people scrambled to buy guns ahead of any proposed gun ban.
If anything Parkland would have helped Remington. A lot.
However, on a different matter, while Bank of America may well sell its part of Remington’s loans, it’s important to realize that it still entered into this loan after swearing off the gun industry. It’s almost like Bank of America will do whatever it has to do to make money.
Normally, I can respect a mercenary attitude. I just prefer people to admit they’re being mercenary about things.
The good news for Remington is that it’s out of bankruptcy and can push forward. What that entails is for Remington to decide, but I’m willing to bet it won’t be by developing guns that no one wants.