Remington Files Bankruptcy On Sunday

Remington Outdoor Company filed its long awaited bankruptcy petition with the US Bankruptcy Court for Delaware on Sunday. The agreement to do the pre-packaged Chapter 11 filing was reached with creditors in February. In the time following that agreement, Remington entered into a number of “material definitive agreements” with the various creditors.

According to Reuters, Cerberus will lose all their ownership rights in the bankruptcy. The equity in the company will now go to the creditors.

The creditors inked the debt-cutting deal prior to the Parkland shooting, and it is unclear if any have exited. The restructuring support agreement allows creditors to sell their holdings, but the buyer is bound by the deal.

One investor told IFR, a Thomson Reuters news provider, that his firm had contemplated buying the Remington loans that will be exchanged into equity, which were offered at as low as 25 cents on the dollar.

“We bowed out because we were uncomfortable,” he said.

After a Remington Bushmaster rifle was used in the Sandy Hook elementary school shooting in Connecticut in 2012 that killed 20 children and six adults, Cerberus tried unsuccessfully to sell Remington, then known as Freedom Group.

Katie-Mesner Hage, an attorney representing Sandy Hook families in a lawsuit against Remington, said in a prepared statement that she did not expect the gunmaker’s bankruptcy would affect their case.

The lawsuit referred to in the last paragraph is now before the Connecticut Supreme Court on appeal. The case was dismissed in state superior court as the judge decided that Bushmaster was protected by the Protection of Lawful Commerce in Arms Act as it was not a case of negligent entrustment which is an exception to the PLCAA.

Here is the bankrupt petition listing creditors and the CFO’s statement. Reuters notes that the court action is expected to go quickly and the restructured company could be out of bankruptcy by May.

Reuters: Remington Seeks Financing To File For Bankruptcy

Reuters reported yesterday that Remington Outdoor Company is in search of financing that would allow it to file for bankruptcy. They have reached out to a number of banks and credit investment funds.

The move comes as Remington reached a forbearance agreement with its creditors this week following a missed coupon payment on its debt, the sources said. The company has been working with investment bank Lazard Ltd (LAZ.N) on options to restructure its $950 million debt pile, Reuters reported last month.

Remington is seeking debtor-in-possession financing that will allow it to fund is operations once it files for bankruptcy, the sources said. The size of the financing and timing of Remington’s bankruptcy plans could not be learned.

Some potential financing sources, including credit funds and banks, have balked at coming to Remington’s aid because of the reputation risk associated with such a move, according to the sources.

In addition to sales being reportedly down 27% for the first three quarters of 2017, Remington faces a $550 million term loan that comes due in 2019 along with another $250 million in bonds that mature in 2020.

In other words, Remington is facing a perfect storm.

It’s Official – Colt Is In Bankruptcy

It have embedded below the Chapter 11 bankruptcy petition filed by Colt Defense LLC and its associated companies with the US Bankruptcy Court for Delaware. The associated companies include both Colt’s Manufacturing Company and Colt Canada. The petition was filed on Sunday evening according to their press spokesman.

I have not had time to read the whole document and I’m not an expert on reading bankruptcy petitions. However, I did read through the list of unsecured creditors to whom it owes money. Number two on the list was Magpul. Colt owes Magpul almost $1 million presumably for PMags, MOE furniture, etc. Many of the other unsecured creditors are small companies that provide services to the firearms industry. As such, Colt’s bankruptcy is going to be felt throughout the industry.

Jim Shepherd at The Outdoor Wire has some good commentary about the role of Sciens Capital Management in the Colt bankruptcy. They are the favored buyer or stalking horse bidder. Also read the commentary on the bankruptcy at

More filings and the press release can be found here.

Report: Chapter 11 Filing Tomorrow For Colt

Matt Jarzemsky of the Wall Street Journal reports that Colt Defense LLC will go into bankruptcy tomorrow.

Gun maker Colt Defense LLC plans to file for chapter 11 bankruptcy-court protection by Monday, according to people familiar with the matter, amid business-execution issues and a heavy debt burden.

The company has secured financing from its existing senior lenders to continue operating while in bankruptcy and expects to remain in business after the restructuring, the people said.

According to the article, Sciens Management LLC owns 87% of Colt Defense. Moreover, some of the principals of that firm have ownership stakes in Colt’s West Hartford, CT plant. The lease on that plant comes up for renewal in October.

Colt will be relying on a bankruptcy court-ordered auction of business assets to help pay down its $355 million in debt. The primary assets that they own are their intellectual property (patents) and their trademark. It is my understanding that these have been heavily mortgaged already.

For a great historical perspective on the origins of Colt’s problems, see this post in the Weaponsman blog by “Hognose”.

I will be checking Pacer tomorrow to see what I can glean from the bankruptcy filing.

H.R.1181 — Protecting Gun Owners in Bankruptcy Act of 2011

Rep. Tim Griffin (R-Arkansas) along with Rep. Mark Critz (D-PA) have introduced a bill on March 17th that would protect up to $3,000 worth of a person’s firearms from being taken in a bankruptcy proceeding.

Griffin is a freshman Republican representing the Little Rock, Arkansas are in Congress. He had served as a JAG Officer in Iraq with the 101st Airborne Division and then as U.S. Attorney for the Eastern District of Arkansas. Griffin is A-rated by the NRA and was endorsed by them in 2010.

Critz, a Democrat, is from Johnstown and won the seat formerly held by the late Rep. Jack Murtha in a special election in May 2010. He went on to hold on to the seat in the 2010 general election. He had worked as the District Director for Murtha for many years. Critz is A-rated by the NRA and was endorsed by them in the 2010 general election. He is also a co-sponsor of HR 822 – National Right-to-Carry Reciprocity.


1st Session

H. R. 1181

To amend title 11 of the United States Code to include firearms in the types of property allowable under the alternative provision for exempting property from the estate.


March 17, 2011

Mr. GRIFFIN of Arkansas (for himself and Mr. CRITZ) introduced the following bill; which was referred to the Committee on the Judiciary


To amend title 11 of the United States Code to include firearms in the types of property allowable under the alternative provision for exempting property from the estate.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


This Act may be cited as the `Protecting Gun Owners in Bankruptcy Act of 2011′.


Section 522 of title 11, the United States Code, is amended–

(1) in subsection (d) by adding at the end the following:

`(13) The debtor’s aggregate interest, not to exceed $3,000 in value, in a single rifle, shotgun, or pistol, or any combination thereof.’, and

(2) in subsection (f)(4)(A)–

(A) in clause (xiv) by striking `and’ at the end,

(B) in clause (xv) by striking the period at the end and inserting `; and’, and

(C) by adding at the end the following:

`(xvi) The debtor’s aggregate interest, not to exceed $3,000 in value, in a single rifle, shotgun, or pistol, or any combination thereof.’.


(a) Effective Date- Except as provided in subsection (b), this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.

(b) Application of Amendments- The amendments made by this Act shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act.