Alert: S$W begins to wobble...

S

simonov jr

New member
Report: Smith & Wesson to Suspend Some
Manufacturing for a Month
By Jeff Donn
Associated Press Writer

SPRINGFIELD, Mass. (AP) - Smith & Wesson, which angered
some competitors and consumers when it struck a federal
gun-safety deal, reportedly plans to shut down two plants for one
month this summer.

WGGB-TV in Boston, citing company representatives it didn't
identify, reported Monday that Smith & Wesson was responding
both to sluggish summer sales and consumer resistance in the
wake of the gun-safety accord. The station said about 500 workers
would be affected at plants in Springfield and Houlton, Maine.

An employee who spoke to The Associated Press on condition of
anonymity Monday, confirmed that an internal memo distributed to
workers Friday said it was "necessary" to close some
manufacturing departments for the month of July.

A spokesman for Springfield-based Smith & Wesson, the nation's
largest handgun maker, did not immediately return a call seeking
comment Monday.

The company hoped its agreement with the government would
bring in more contracts from city police departments. But a
conference of the National Rifle Association last month
underscored how the deal has hurt the company with some
buyers, as some shunned the gun maker's exhibit.

In the March 17 agreement, Smith & Wesson promised to install
safety locks, demand background checks on gun-show buyers,
and work on guns that can be fired only by their owner. Public
officials agreed to drop Smith & Wesson from municipal lawsuits
challenging the safety and marketing practices of the gun industry.

AP-ES-06-12-00 2205EDT
© Copyright 2000 Associated Press. All rights reserved. This material may not be
published, broadcast, rewritten, or redistributed.
Brought to you by the Tampa Bay Online Network

I for one will drink a toast when they go belly up. This is a great example to others who would go the Benedict Arnold route. As I recall, after hanging blue beard. the brits put his head on a pike at the entrance to the harbor. Seemed to deter other pirates nicely...
 
I hope those 500 workers never get the chance to return! I wish them well and there families, but this company has be sold into friendly 2nd amend. hands at a big ass discount and there is going to have to be some pain before that happens.

Keep up the boycott.......money talks......traitors walk!!!!!!!
 
I used to like new S&W products, now I like only used S&W products, I wouldn't buy anything from the factory or retail where my dollars would benefit the Chairmen or the company. I hope to see the company sold (who knows, maybe auctioned at EBay), and give a loyal to gun rights entrepeneur an opportunity to make it a great name once again.
 
Ummm, guys, when somebody buys a company, they buy the debts & obligations as well as the assets. The only possibility is for S&W to go belly up, then someone buys the rights to the name at a later date. Other than that, as long as S&W exists, the agreement will be in effect.
 
I was under the impression that the agreement was exactly that, an agreement. Because as we all know, there was NOTHING LEGAL ABOUT THIS! I believe that if S&W is sold, then the new management can break the "friendly agreement", recognizing it as the bad buisness practice that it is!

------------------
I thought I'd seen it all, until a 22WMR spun a bunny 2 1/4 times in the air!
 
Dave, not if a new owner says "I declare this agreement void".

No more agreement. We KNOW the bloody Brits won't say it. That leaves AMERICANS to do the job.
 
I believe the government, executive, legislative or judicial can also void the agreement, which should happen with a Bush victory. I would rather that it go down from new owners of S$W.
 
Danger Dave, fortunately for us when one purchases the assets of a corporation (or other entity) one is NOT obligated to assume the debts and liabilities of the purchased entity.

[Warning: legal exposition on asset and stock sales forthcoming.]

Buyers will always prefer asset sales -- the assets are sold free and clear of the liabilities of the seller, subject to the terms and conditions of the asset purchase agreement. The buyer can agree to assume liabilities, but is not required to do so.

Think of it as you selling your car to someone else -- the buyer is not required to take over your bank loan on your car, but may do so (subject to bank approval). If the buyer does not want to assume the loan, he or she gives you the money and you are free to take the money and pay down your car loan -- or you can use it to buy beer, it's your money after all.

However, asset sales can trigger all sort of unwanted tax liabilities, bulk transfer tax coming to mind. I'm no tax attorney so I stay away from tax issues and let the experts with the LLMs from NYU handle that sort of thing.

Sellers always prefer stock sales. Stock sales are when the seller transfers the equity of the corporation (or whatever) to the buyer. Transfer of the stock is NOT transfer of the corporate entity so tax on the sale of assets is not implicated. However, the buyer takes all liabilities of the purchased entity, along with all assets as well.

Think of this situation as if you owned 100% of the stock of a corporation (XYZ, Inc.) whose sole asset was a car. This car is encumbered by a bank loan. You sell all your stock to your brother. Your brother now owns all the stock of XYZ, Inc. -- which still owns the car, which is still encumbered by the bank loan. Unlike the asset sale, the car is still owned by XYZ, Inc. -- only the owner of XYZ, Inc. has changed, not the owner of the car. XYZ, Inc. is still bound by the bank loan (which produced the lien on the car) so the liabilities will follow the assets in this stock sale.

I will skip a discussion of forward and reverse mergers.

Suffice it to say that if a new entity were to purchase the assets of S&W without assuming the HUD contract, the new entity would not be bound thereby.

The above is not a legal opinion or legal advice.

Justin

------------------
Justin T. Huang, Esq.
late of Kennett Square, Pennsylvania
 
Or if S & W files bankruptcy someone could have the bankruptcy court void the contract and buy either stock or assets.
 
Waterdog, I would respectfully point out that S&W does not feed us, IMHO.

jthuang, your examples are helpful. The car example is not exactly right - if you buy a car encumbered by a bank loan (rather like a home), you'd better make sure that loan is paid off if you want free and clear title. Secured loans generally run with the property, and encumber the title.

And, transfer of corporate stock is a transfer of the entity ... I think you meant it is not, technically, a transfer of the assets.

If both parties to an agreement want to void the agreement, that is certainly possible. I would hope a Bush administration would do just that, and I'm sure S&W would be happy to oblige.

By the same token, a bankruptcy proceeding could also eliminate this agreement.

So, the only question really left in my mind is whether S&W can last long enough for a hoped-for Bush administration. If so, no problem. If not, then this may be resolved in their liquidation. I don't really expect the S&W name to die. But, I wouldn't be surprised to see those assets in the hands of another company in the next year or two.

BTW, everyone should notice the very (typically) sanitized version of the 'agreement' reported by the AP. Read the agreement, and the many interpretations. There is a hell of a lot more to it than this article would lead you to believe.

One last point ... if we buy used S&W products, it still helps the company indirectly. Think about it.

S&W must die.

Regards from AZ
 
Jeff,

Waterdog's analogy -- "Don't bite the hand that feeds you" -- is correctly used.

In essence, S&W (the dog) bit American gunowners, the people who feed money into the company by purchasing S&W firearms.

As for buying a used S&W helping the company indirectly, please explain.

The only way I could see it helping S&W is by possibly promoting their work to non-S&W owners that we come into contact with.

The company certainly doesn't make any kind of financial gain from the sale of a used firearm.

------------------
Beware the man with the S&W .357 Mag.
Chances are he knows how to use it.
 
No one has pointed out the outright dishonesty of the press. This is not a safety agreement but rather an attempt for the clintonoviks to push down this nation's throat what they could'nt get done through Contituional channels.

I have a confession to make: my wife has a subscription to Time Magazine. As soon as it comes in, I throw it in the trash. I would do the same if we took ANY major newspaper in this country. The Free Press is no longer free.

------------------
"When guns are outlawed;I will be an outlaw."
 
YEEHAW!

Smith and Wesson killed thier domestic sales in order to release themselves from the anti's lawsuits, turn "State witness" by providing D.O.J. with money and assistance for their records, and lastly to free themselves from litigation.

It seemes thier sell out is not paying off the way they hoped!!!!!

I hope like all bad componies they go out of buisness or get re-orginized without the capitulation if possable....

YES buying used will help S&W. IN time if this sorry state of affairs continues, then immoral folks will buy pistols to sell to those who want used "pre-agreement pistols" (let alone just normal folk)... tell me a year from now how will you tell what is "pre" or "post"? For now however buying used Does hurt them...eventualy you will be perpetuating the market and demand for S&W.(driving the used market up so a person who is not caring would buy new is also a possability!)

Keep the faith....

IZZY
 
Here's hoping that the end result of all of this is the very talented workers back in the factories assembling the best revolvers on the market soon. But that's contingent upon S&W being bought by an American (or a GROUP of Americans) that will break that ludicrous "agreement". I, too, am on the lookout for USED S&W firearms until that time.

It's been bandied about a couple of times, so let me bring it up again.

Would any or all of you be willing to come up with a few hundred or a few thousand dollars to pile together to buy this company to preserve it?

Think about it. Those ARE the best mass-produced revolvers on the market. I don't care much for their autos, but some do.

A group once risked their lives, FORTUNES, and sacred honor for us, their posterity. Could we pull this off? I am quite certain that we could get pretty reasonable terms from the current owners in light of their "plight".
 
Jeff,

Regarding the car example, no one said free and clear title had to be transferred -- it is entirely possible for a buyer to take a car without clear title. It just needs to be agreed upon -- usually with a purchase price reduction. The buyer then usually pays off the lien....

But that's the problem with using cars to illustrate the transfer of an entity, when entities (and assets) are taken without clean title on a routine basis.

You're right on the stock sale part -- I should have been more clear there. Shows what I get for skipping coffee in the morning.

I agree, S&W must die. Ruger and Colt too.

Justin
 
Mike, I was looking at the 'bite the hand that feeds you' in a way opposite from your perspective. I thought my comments clarified that point, but I'm sorry if I seemed off track.

And, IZZY covered the point well regarding used S&W firearms. The new ones still have value if they can also be sold used. Look at it this way ... would you want to buy a car that had no resale value, like a Yugo? S&W will be 'cured' most quickly if their products have no value, new or used. The entire market should dry up.

Since I've come to appreciate S&W revolvers as well, this pains me no end. But, I will hope it is a relatively temporary situation. If not, so be it. There are casualties in war, and this is certainly war, started by a hysterical anti-self defense movement, and furthered in no small measure by a nearly fascistic Clinton administration.

Regards from AZ
 
<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by jthuang:
Jeff,

I agree, S&W must die. Ruger and Colt too.

Justin[/quote]

Justin: I agree about Colt and S&W. Keep in mind that Bill Ruger acted on behalf of an industry group pushing for a 15 round limit. Granted, there should be no limit but I am curious to see who the OTHER people were in that trade group.

Since that time, Bill Ruger donated $1 Million to the NRA and has stated that there will be no other concessions and certainly no ballistic fingerprinting by Ruger.

Now Justin, if I follow your logic and leave Ruger then should'nt I leave Glock as well? Remember, per the WSJ, Paul Januzzo, VP and Chief Counsel for Glock in the U.S. was slipping around meeting in private with DOJ officials and Glock almost signed the same deal that S&W did. Thank God they did'nt.

The "If your'e not guilty you have nothing to worry about" dog does not hunt here. As a law-abiding citizen, I am against ballistic fingerprinting------period. I have held off from buying another Glock because of this.

If we are going to punish Ruger, we must punish Glock or does the perfection justify a double standard.

I know where you are coming from and this is NOT a flame. If S&W repented today, I would support them.


------------------
"When guns are outlawed;I will be an outlaw."
 
You must log in or register to reply here.
Back
Top