One of America's oldest gun manufacturers, Remington Outdoor Co Inc, filed for bankruptcy protection Sunday to allow for a debt-cutting deal with creditors while the pressure for increased gun control mounts in the wake of the school shooting in Parkland, Florida.
Remington listed assets ranging from $500 million to $1 billion and liabilities of the same value. The gun company announced the deal in February to reduce its $950 million debt in a deal that will see control of the company transferred to its creditors. Remington was founded over 200 years ago in 1816 and boasts the title of the oldest factory in America to still be producing its original product.
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The deal coincides with the February 14 school shooting that claimed the lives of 17 people in Parkland, Florida. The shooting led to protests across the country that seek stricter gun control laws. Several American companies announced restrictions on the sale of assault weapons at their stores including Dick's Sporting Goods which announced they would stop selling them for good.
Citigroup Inc also announced last week they will require clients to sell firearms to only those who passed background checks and barred the sale of high-capacity magazines altogether. The transfer of Remington's assets will mean Cerberus Capital Management LP, the private equity firm that controls Remington, will no longer retain ownership of the company.
The creditors which Remington is indebted to will accept equity in the company in exchange for their debt holdings. According to Reuters, those creditors include Franklin Templeton Investments and JPMorgan Asset Management. The new agreement will also allow creditors to sell their holdings.
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Remington loans were offered as low as 25 cents on the dollar prompting investors to consider buying the loans that will be exchanged for equity but ultimately even at the wholesale price investors passed on the opportunity. "We bowed out because we were uncomfortable," one investor said.
Cerberus tried unsuccessfully to sell Remington after the 2012 Sandy Hook elementary school shooting in Connecticut that killed 20 when it was discovered a Remington Bushmaster rifle was used by the shooter. A lawyer representing Sandy Hook families in a lawsuit against Remington said she did not expect the company's bankruptcy to influence their case.
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