Remington Outdoor Company officially filed for Chapter 11 bankruptcy protection in a Delaware court on Sunday. The company had previously planned on filing back in February. That filing was delayed after the Parkland shooting on Feb. 14.
Remington Outdoor Company Restructuring
“Directors have determined that it is advisable and in the best interests of the Company that the Company file, or cause to be filed, a Voluntary Petition commencing the Chapter 11 Case,” Remington said in the bankruptcy filing.
According to USA Today, the restructuring agreement outlined in the filing reduces Remington Outdoor Company’s $950 million debt by $700 million. It also allows for $145 in new capital to flow into the company’s subsidiaries. Those subsidiaries include Remington, Bushmaster, DPMS Panther Arms, Marlin, Barnes, Advanced Armament Corp. and others. In addition, the deal provides $100 million in money from creditors as a debtor-in-possession loan.
The agreement ends Cerberus Capital Management’s controlling interest in Remington Outdoor Company. Cerberus bought the company back in 2007. Instead, the company will now be controlled by a group of creditors. New York Business Journal lists Franklin Templeton Investments and JPMorgan Asset Management among the creditors.
Under the terms of the deal, employee wages and benefits will continue uninterrupted.
In the bankruptcy filing, Remington Outdoor Company CFO Stephen Jackson said the company faced a number of financial setbacks over the past year. In 2016, the company borrowed money to boost production in anticipation of raised consumer demand in 2017. But that demand “ultimately did not materialize,” Jackson stated in the filing cited by USA Today.
At the same time, Remington faced competitive market pricing. The pricing came as a result of a glutton of inventory across the industry. In addition, “accelerating reduction in demand” was a culprit, Jackson said.
In addition, Jackson said Remington dealt with pressure from competitors that utilized “unusually heavy discounting and promotions to reduce their own excess inventory.”
Bankruptcy proceedings are expected to wrap up as soon as May 3, the New York Post reported.
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