U.S. firearm manufacturer Remington on Monday filed for Chapter 11 bankruptcy protection in Delaware federal court. The filing follows an agreement last month with its major creditors, and a decline in gun sales last year. File Photo by Erik S. Lesser/EPA-EFE
March 26 (UPI) -- U.S. firearms manufacturer Remington has filed for Chapter 11 bankruptcy, weeks after it reached an agreement with creditors in view of sagging gun sales.
The company filed for bankruptcy protection in federal court in Delaware Sunday.
Remington announced last month it planned to restructure $700 million in debt with its major creditors, as well as $145 million in new capital, so the company could continue manufacturing while in bankruptcy.
The announcement of the restructuring came two days before the Parkland, Fla., high school shooting that killed 17 people and increased demands for changes in U.S. gun control legislation.
Retailers, including Walmart and Dick's Sporting Goods, reacted to the shootings with restrictions or elimination of gun sales.
Remington, which also manufacturers Marlin and Bushmaster guns, reported that sales last year were just over $600 million -- a 30 percent decline from 2016 -- and its profits fell 90 percent. In a letter to investors Friday, the company said it had a negative operating cash flow of $7.4 million.
Overall gun sales in the United States declined during the first 14 months under President Donald Trump, perhaps due to a belief that gun sale restrictions were unlikely in the Republican administration.
The company has also faced product liability issues. It agreed to replace triggers on millions of Model 700 bolt-action rifles, its signature product, in a class action settlement.
Remington has not indicated whether the bankruptcy filing will affect the agreement to replace the parts.