Remington Arms Company has filed for bankruptcy for the second time in over two years.
The gun manufacturer, one of the oldest in the United States, filed for Chapter 11 bankruptcy protection on Monday as it struggled under a mountain of high-interest debt and legal fees, according to The Wall Street Journal. The filing comes as gun sales are surging across the United States in a market driven by the pandemic and violent protests.
Remington has faced steep financial challenges for nearly a decade following a lawsuit by family members of victims killed in the 2012 mass shooting at Sandy Hook Elementary School. The gunman used a Remington gun, the Bushmaster, to kill 20 children and six adults.
Gun-control activists used the tragedy to pressure Remington’s investors as well as stores that carry Remington products to cut ties with the company. The pressure campaign worked to some extent, forcing the gun company to take out high-interest loans to buy out investors. At the same time, the company borrowed to cover mounting legal fees as the shooting victims’ families attempted to hold the company accountable for the gunman’s actions.
In 2018, Remington filed for bankruptcy and restructured, transferring most of its ownership over to its creditors, including Franklin Templeton Investments and JPMorgan Asset Management, according to The New York Times.
In March of last year, the Connecticut Supreme Court ruled that the lawsuit over the Sandy Hook mass shooting could move forward, a blow to the company.
The plaintiffs argued that Remington’s marketing for the Bushmaster, an AR-15-style rifle played a role in the shooter’s choice of weapon. The gun company argued that federal law protects it from liability should its products be used to commit criminal acts such as in the case of Sandy Hook.
UCLA law professor Adam Winkler told the NYT that the gun company’s financial troubles are almost entirely due to its poor management and legal troubles, and the company’s failure is not likely to be repeated throughout the industry.
“Remington’s problem is mostly a problem of Remington mismanagement and not a reflection of larger trends in the gun world,” Winkler said. “I don’t think we’re going to see a whole bunch of gun companies going under now.”
In June, gun sales at retailers surged over 145% from June 2019, according to a study by Small Arms Analytics & Forecasting. The spike in sales came after the outbreak of violent protests and riots in the wake of George Floyd’s death. Floyd, a black man, died in police custody after an officer kneeled on his neck for close to nine minutes.
The June spike followed similar surges in demand in May and April after the outbreak of the coronavirus pandemic and forced government shutdowns of wide swaths of the economy. National Shooting Sports Foundation spokesman Mark Oliva said the high demand is being driven by widespread “uncertainty.”
“This shows us there is continued appetite among Americans to be able to provide for their own safety during times of uncertainty,” Oliva said. “These are buyers who have witnessed their government’s empty prisons … Police departments are stretched beyond capacity in many cases. Law-abiding Americans recognize this and exercising their right to own a gun and defend themselves and their loved ones.”
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