Remington situation

[Seamaster31]

I want to take a quick shot at providing some input into the internet discussion of bankruptcy. It has been many years since I darkened the doorway of a law school, and our firm has been involved in bankruptcy matters for corporate clients.

The outcome of the Remington situation is anybody's guess, and the facts are only known to the people directly involved. This is a Chapter 11 filing which provides temporary relief from creditors and a chance at reorganization. The plan appears to be a sale of the the assets of the entire operating company, it's component parts, and the related operating units. There may well be a different buyer for the ammunition components (Remington, Barnes, etc.) than the firearms components. At this point this is not a Chapter 7 dissolution.

There has not been a preferred initial bidder (often called a "stalking horse") identified yet to my knowledge. Hopefully there will be a few qualified bidders and the results will certainly be interesting.

The folks in my firm and others well versed in this type of event believe that the impending civil suits by the Sandy Hook group are a major driver in the forthcoming decisions. Assuming the court gives it's blessing to the sales, after the listed creditors are satisfied there may be an empty bucket left for the Sandy Hook plaintiffs if they continue and prevail. The liabilities or potential liabilities of the current corporation will not follow the sold assets to their new owners.

Selling the plants, equipment, and intellectual property (patents, trademarks, etc) to new operating companies does not necessarily mean that the Remington name and the associated products will be changed or discontinued. It is quite possible that the same products will be manufactured and marketed just as before, but with different stockholders.
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I am not involved in this matter and therefore have no insider information. Any guess as to the outcome by me would be a wild guess. I suspect that is the same as most of the fellows on internet boards.

 

[AlexanderA]

There has not been a preferred initial bidder (often called a "stalking horse") identified yet to my knowledge. Hopefully there will be a few qualified bidders and the results will certainly be interesting.

It's possible -- even likely -- that a consortium of interested parties (management, employees, customers) can be assembled to make a bid. This could result in a "cooperative" structure that would be more responsive to the market.

 

[bearcreek]

There has not been a preferred initial bidder (often called a "stalking horse") identified yet to my knowledge. Hopefully there will be a few qualified bidders and the results will certainly be interesting.

Supposedly the Navajo Nation was considering bidding on/buying them. Have they decided not to pursue that further?

 

[mcb]

Supposedly the Navajo Nation was considering bidding on/buying them. Have they decided not to pursue that further?

The Navajo Nation we never super serious about it. They had made tentative investigations and the media ran with it and made a bigger deal of it than it was. They officially withdrew a few weeks ago. In one of the other Bankruptcy threads I had posted a link to an article about it and made it seem they were never more than curious about the possibilities.

 

[Seamaster31]

No potential bidder is serious until they have been qualified. I think of all bidders that have gone through the time and cost of the qualification process as "serious". The Navajo group was apparently serious and it was thought to be named as the stalking horse in the process, but that is not the situation now.

I have read some articles where it was questionable if the author had any knowledge of the subject matter. One article that I read the author made it sound like it would be the type of auction that would be held in an auction barn. People should stick with writing about a subject that they know, but they often do not.

 

[Seamaster31]

It is like talking to the wall. I give up.

 

[rust collector]

I am not sure of the reason for your frustration, Seamaster. There is at least one other thread dealing with the fate of Remington, but I'm not sure anyone knows who all the players are or what will happen. Other than conjecture on what will go where, what are your expectations?

Folks love to do post-mortems with the help of hindsight, and there will always be Ford/Chevy/Mopar bickering, but in my experience, Remington had held things together a lot longer than many large companies we grew up with. I suspect that firearms consumers in the US are a tough audience, as we always want better stuff cheaper, but we decry cost cutting measures and yearn for the way things were made 50 or 60 years ago. If Remington is no more, that is good fortune for its competitors. If there are parts that have value, that value will be used to help with debt. The only thing certain is that we lose some choice in the marketplace and unsecured creditors fight for remnants, if any.

 

[edwardware]

. . . believe that the impending civil suits by the Sandy Hook group are a major driver in the forthcoming decisions. . . The liabilities or potential liabilities of the current corporation will not follow the sold assets to their new owners.

This is a remarkable fact that I did not know. I assumed civil liabilities would follow assets, like liability for environmental cleanup does.

 

[mcb]

This is a remarkable fact that I did not know. I assumed civil liabilities would follow assets, like liability for environmental cleanup does.

Shedding the lawsuit "mill-stone" would be a big boon for whoever the new owners might be, if that is legally possible. If not why would anyone buy Remington given how bad that lawsuit will be for Remington if lost, compared to the value of what you get given the current condition of Remington both in assets and reputation.

That environmental/EPA part is a big deal too, given the age of the Remington Ilion NY facility. There are no doubt some EPA nightmares to be found in the facility (some of the still existing buildings are nearly 200 years old) if it changes hands and has to go through any type of EPA inspection during that. I suspect Remington is grandfathered into a lot of EPA stuff the new owners will not be.

 

[theotherwaldo]

I still think that any real interest in this affair is on hold until after November 3rd... .

 

[mcb]

I still think that any real interest in this affair is on hold until after November 3rd... .

That may be true, but Remington is almost certain to have a new owner(s) by the end of September.

 

[theotherwaldo]

Yep, but the uncertainty certainly serves to keep the interest down.

 

[crestoncowboy]

Good job explaining the process. Im no law expert but i do work for a massive company with teams of them. I see much fine print here.

Just my opinion but
I dont think the election is as big a factor for Remington/ marlin etc as it would be most firearm companies that make more handguns and mag fed rifles. Marlin, Remington, Dakota, H&R etc are more known for long guns that are more hunting oriented. I remember when Remington actually went out of their way to separate their failed camouflage "modern sporting rifles" from the hundreds of other "ar15" rifle. They have bushmaster and dpms but those may as well be dead anyway in my opinion. I could be wrong though. Not saying the election couldn't hurt them, but the main (or at least first) talking points of the grabbers are usually mag fed semi auto rifles and handguns.

If the AWB of the 90s-00s were reinstated it would likely be a boost for remington and marlin sales IMO. Not a curse. would it not? Shedding the legal liabilities they are staring at is imperative i think. As well as getting out of NY.

 

[mcb]

Good job explaining the process. Im no law expert but i do work for a massive company with teams of them. I see much fine print here.

Just my opinion but
I dont think the election is as big a factor for Remington/ marlin etc as it would be most firearm companies that make more handguns and mag fed rifles. Marlin, Remington, Dakota, H&R etc are more known for long guns that are more hunting oriented. I remember when Remington actually went out of their way to separate their failed camouflage "modern sporting rifles" from the hundreds of other "ar15" rifle. They have bushmaster and dpms but those may as well be dead anyway in my opinion. I could be wrong though. Not saying the election couldn't hurt them, but the main (or at least first) talking points of the grabbers are usually mag fed semi auto rifles and handguns.

If the AWB of the 90s-00s were reinstated it would likely be a boost for remington and marlin sales IMO. Not a curse. would it not? Shedding the legal liabilities they are staring at is imperative i think. As well as getting out of NY.

Remington killed Bushmaster, DPMS and Tapco in January. They are completely dead. They are no longer being made at all. All the remaining products in those brands got sold off at fire sale prices at the beginning of the year.

In an election year they stopped making the firearms that were most in demand...

 

[crestoncowboy]

In an election year they stopped making the firearms that were most in demand...

I didn't know they were dead already. I get two of the NRA magazines but to be honest I cant stand to read them. Anymore I don't even flip through to look at the pictures.....most of which are of Pelosi anyway. Lol.

Normally I'd agree. But with all the heat on bushmaster I think they may have made a good choice. May look favorable in court if it ever goes that far. But idk. Im armchair quarterbacking at best. Like I said I work for a billion dollar company. Sometimes the decisions made are strange to say the least.

I do know that during the last ban I bought 10-15 remington/marlin long guns. Since the ban died in 04 I can think of only 1. And that was a decent deal on a marlin 39a. Hence my comment about the Ban.

 

[theotherwaldo]

The election uncertainty is more likely to dissuade purchasers of the Remington company or its components than it is to directly affect Remington.

 

[ilbob]

I personally still think Bushmaster, DPMS and Tapco have value as brand names. Bushmaster and DPMS were basically just run of the mill AR manufacturers, but fairly well known, as was Tapco in their product lines.

I think most people see Remington as a manufacturer of hunting and clay sport type guns. I think there is value left in that name as well. I think by trying to get into the AR and pistol market they confused the gun buying public of what Remington was all about.

The problem I see is that they have old and obsolete facilities in a part of the country that is no longer desirable for any manufacturer to be in, especially a firearms manufacturer. The best thing a buyer might do would be to buy the assets of the company other than the buildings from the bankruptcy court and move them to more friendly environs, IF they can figure out how to make that work. My guess would be that a lot of the machines are so old that you might well need the workers to come with the machines to make it work and they might not be interested in moving.

I also think there is value in the Marlin brand. They have made some really decent and cost effective firearms for a lot of years.

I also think another gun maker might want to look at the Remington mess and see what can be made profitable. Maybe S&W or Ruger, especially if they can get it cheap and have room at existing factories. Maybe even Charter, but I think they are just too small and undercapitalized to make such a thing work.

 

[MAKster]

As I said in a previous thread I think Remington will end up like Winchester. The brand name will continue but the firearms will be manufactured by another company. In 1980 Olin sold the New Haven factory and the right to manufacture Winchester firearms to US Repeating Arms Company. USRAC was created by a group of Winchester executives for the sole purpose of taking over Winchester production. Remington will likely be "sold" to a similar shell company for little to nothing. The sale will just be a legal/accounting maneuver to get it off the books of the current owners, JPMorgan Chase and Franklin Templeton.