Firearms manufacturer Remington Arms Co. is preparing to file for chapter 11 protection for the second time since 2018 and is in advanced talks for potential bankruptcy sale to the Navajo Nation, people familiar with the matter said.
The bankruptcy filing could come within days as the gun maker makes preparations for the Navajo Nation to serve as the lead bidder to purchase Remington’s assets out of chapter 11, these people said. Founded in 1816, Remington’s namesake weapons are mainstays in hunting, shooting sports, law enforcement and the military.
The Navajo Nation—a territory with roughly 175,000 people across parts of Utah, Arizona, New Mexico—could finalize a bid for Remington as soon as Friday, one of the people said. Any bid for the company would be subject to competing offers and require bankruptcy-court approval.
The timetable could be pushed back, and an offer from the Navajo Nation isn’t guaranteed to materialize, people familiar with the matter said.
Despite cutting some $775 million in debt through the 2018 bankruptcy, Remington has continued to face high interest costs and operational issues, according to people familiar with the matter, and expensive litigation surrounding the 2012 Sandy Hook Elementary School shooting.
Remington has been operating in a fraught environment for the firearms industry, especially after the February 2018 school shooting in Parkland, Fla., that spurred a movement demanding greater gun control and prompted some big investors and retailers to reconsider their ties to the gun industry.
The industry’s fortunes also tend to rise and fall based on the country’s political climate. Under former President Obama, firearm sales rose as enthusiasts feared gun control. Demand has generally fallen since President Trump took office, though the number of gun background checks—a proxy for sales—rose in recent months as fearful Americans rushed to stock up on firearms and ammunition during the coronavirus pandemic.
But the recent surge in sales hasn’t been enough for Remington, which makes firearms at facilities in Ilion, N.Y., and Huntsville, Ala.
Remington previously filed for chapter 11 in March 2018, transferring ownership from Cerberus Capital Management LP to creditors, including Franklin Resources Inc. and JPMorgan Chase & Co. Franklin remains the company’s largest shareholder, people familiar with the matter said.
The Navajo Nation and Franklin didn’t respond to requests for comment. Remington and JPMorgan declined to comment.
The company also continues to face litigation from families of victims of the Sandy Hook school shooting. Families of the Connecticut school killings filed wrongful-death claims against Remington, accusing the gun maker of producing and selling a weapon unfit for civilian use.
The Connecticut Supreme Court last year said that while the families couldn’t sue Remington for merely selling the Bushmaster XM15-E2S rifle used in the shooting, they could proceed on allegations the company improperly marketed the weapon to civilians for use in military-style combat against perceived enemies. Remington appealed the ruling to the U.S. Supreme Court, which declined to hear the case.
A bankruptcy sale would give a potential buyer the chance to purchase Remington free from legal liabilities, people familiar with the matter said.
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