As expected, the largest firearms maker in the U.S., Remington Outdoor Co., has finally filed for Chapter 11 Bankruptcy Protection. The company announced in February 2018 that they intended to file for a Chapter 11 amidst flagging sales and a heavy debt burden.

Apart from being the largest firearms maker in the U.S., Remington is also the oldest, having been in business for over 200 years. The company is owned by Cerberus Capital Management which also announced that it plans to let go of the company once the bankruptcy is complete. The company has its headquarters in North Carolina with seven factories and a total of 2,700 employees.

Photo: Remington 870 DM Predator (Source: Remington)

The company is said to be suffering from the “Trump Effect” in which firearms companies are experiencing lower sales because gun owners are not worried about a Republican administration enacting restrictive gun controls which they believe will only be imposed by a government headed by the Democrats. Affected firearms manufacturers have already laid off hundreds of employees due to this effect.In February, the company, which is burdened by debts of over US$900 million seeks to reduce its debt obligations. It is also facing a class action suit for the defects on their popular firearms such as the M700 and the Sandy Hook Massacre as the company produces the Bushmaster AR-15 rifle that was used by the shooter.

While under Bankruptcy Protection, Remington still plans on producing guns as the operations will not be disrupted during the restructuring process. Some of the creditors will be exchanging the debt they are holding for equity. There is no indication if the during the process they will be laying off employees or if creditors have changed their minds after the Parkland shootings which led to heavier pressure for gun control laws enacted.

Perhaps, come mid-term elections in November 2018, firearms manufacturers will be rooting for Democrats to take control of Congress so that the gun control scare will again push gun owner to stock in guns again leading to increase sales to solve their sales and profitability problems.