Remington Outdoor, one of the US’s biggest gunmakers, has filed for bankruptcy protection as it struggles against a mountain of debts and falling sales.
The 202-year-old company, which made the Bushmaster AR-15-style rifle used in the Sandy Hook shooting in Connecticut that left 20 first-graders and six teachers dead , filed for chapter 11 protection in Delaware bankruptcy court on Sunday.
The official filing came during a weekend of mass March For Our Lives protests across the US of children calling for greater gun control laws after 17 deaths in a school shooting in Parkland, Florida.
Remington, which is owned by Cerberus Capital Management hedge fund, said it had debts of between $100m-$500m (£70m-£352m) and estimated that its assets were worth about the same amount. The company plans to reduce its debts by transferring control of the firm to its creditors.
Gunmakers have suffered since the election of Donald Trump, who describes himself as a “true friend” of the industry, because gun enthusiasts typically buy more firearms when they fear that politicians might be about to bring in tighter controls. In the first nine months of Trump’s presidency, Remington’s sales declined by 27.5%.
“They call it the Trump slump,” said Robert Spitzer, a professor at the State University of New York and expert on the economics of guns. “Gun sales have become politicised to a great degree. Gun purchases recently have been made not just because someone wants a new product but to make a statement; not just because of fears that there might be tighter regulation, but also to make a statement against Obama.”
Cerberus Capital Management’s billionaire chief executive, Stephen Feinberg, is a major Trump supporter and donated nearly $1.5m to pro-Trump political action committees in the run-up to the 2016 presidential election.
Remington is being sued by the parents of the Sandy Hook victims in the Connecticut supreme court. Attorneys representing Sandy Hook families in the lawsuit said they did not expect the gunmaker’s bankruptcy to affect their case.
After the shooting, Cerberus came under pressure from its investors to sell Remington.
But the hedge fund struggled to find a buyer and settled for letting investors sell their shares in the company. The bankruptcy will allow Cerberus to sever ties with Remington.
The US has the highest rate of gun ownership in the world with 88 for every 100 people. But just 3% of the population owns an average of 17 guns each, with an estimated 7.7 million super-owners in possession of between eight and 140 guns apiece.
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