Remington Headed for Second Bankruptcy

i'm not surprised. The previous owners of Remington bled the company dry and dumped it as being politically incorrect.
 
thallub said:
i'm not surprised. The previous owners of Remington bled the company dry and dumped it as being politically incorrect.
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This is partially true. Cerberus bought Remington, borrowed hundreds of millions of dollars and through a financial shell game moved the money to them and saddled Remington with the debt. When the gun buying panic of 2016 stopped, Remington could no longer service the debt. That's why Remington is bankrupt. Politically incorrect had little to do with it.

In order to buy Remington, Cerberus, as most private-equity firms would, created a new entity, a holding company. Instead of Cerberus buying a gun company, Cerberus put money into the holding company, and the holding company bought Remington. The entities were related but — and this was crucial — each could borrow money independently. In 2010, Cerberus had the holding company borrow $225 million from an undisclosed group of lenders, most likely hedge funds. Because this loan was risky — the lenders would be paid only if Remington made a lot of money or was sold — the holding company offered a generous interest rate of around 11 percent, much higher than a typical corporate loan. When the interest payments were due, the holding company paid them not in cash but with paid-in-kind notes, that is, with more debt. These are known as PIK notes.

The holding company now had $225 million in borrowed cash. Cerberus, meanwhile, owned most of the shares of the holding company’s stock, basically slips of paper they acquired when they created the holding company. The handoff happened next: The holding company spent most of the $225 million buying back its own stock, effectively transferring all the borrowed cash to Cerberus. Cerberus would keep that money no matter what. Meanwhile Remington continued rolling along as though nothing had happened, because Remington itself was not responsible for the holding company’s debt. Remington was just an “operating company” that the holding company owned, something that allowed the holding company to borrow money, the way you would take a necklace to a pawnshop. These were garden-variety maneuvers in a private-equity buyout. In the trade, this is called “financial engineering.” People get degrees in it.

In April 2012, Cerberus did something fateful, which probably seemed smart at the time. It had Remington borrow hundreds of millions of dollars and use it to buy the holding company’s debt, effectively transferring responsibility for the principal and the interest payments onto Remington. America’s oldest gun company now owed the money that Cerberus had used to pay itself back for having bought the company in the first place. There were plenty of sensible reasons to do this. Gun sales were high, and the debt that Remington took out was cheaper to service than the paid-in-kind debt.

But there was a catch. Because the operating company borrowed the money with a normal loan — and not with PIK notes — interest payments were required in cash. Suddenly Remington was carrying hundreds of millions of dollars in debt that, if it could not be paid, would cause the business to go bankrupt.

https://www.nytimes.com/interactive/2019/05/01/magazine/remington-guns-jobs-huntsville.html

Check out the linked article. It's a longish read, but it explains the situation very well.
 
natman said:
That's like saying "I wish I had enough money to buy a giraffe.".

I don't want a giraffe, but I'd like to have that much money.
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Sooo, how much does a giraffe cost?

Edit: I googled it, $40K to $80K. I’d much rather have the money to buy Remington.
 
I can afford the giraffe but can not afford to purchase Remington and all of the debt that goes with the deal. It's kinda like Hostess...let it go Chapter 13 and then buy the Brand, Tooling, and Intillectual Property rights. Otherwise you just bought into all of the structural problems and issues.
 
At one time I worked at a high tech firm and with all the financial shenanigans going on in the 80's (leveraged buy outs, pension plan raiding etc.) someone opined that with the actual cash money in our break room coffee fund (sometimes it got up to $8 to $10) and the right lawyers we could orchestrate a serious run at taking over the company ourselves. In retrospect that would have turned out much better for the company and us both.
 
I’ll be sad to see such a historic company collapse, but at least some of this has to have been brought on by the horrible new products the company has released. I’m not sure if there are any Remington models other than 870 shotguns that I would be willing to buy at this point in time. I really hope Remington can pull through, but they have got to get back to producing quality products. If we’re lucky, maybe they can sell Marlin and give another owner a chance to save that brand.
 
wmg1299 said:
I’ll be sad to see such a historic company collapse, but at least some of this has to have been brought on by the horrible new products the company has released. I’m not sure if there are any Remington models other than 870 shotguns that I would be willing to buy at this point in time. I really hope Remington can pull through, but they have got to get back to producing quality products. If we’re lucky, maybe they can sell Marlin and give another owner a chance to save that brand.
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Their higher end 700 rifles are good.
 
I have owned three Remington rifles in my life. The only one I kept is a 22LR Fieldmaster pump gun. I don't care to own any more.

But, it is sad to see a company as old as Remington get screwed over the way they did. See, I am not without some compassion.
 
I suspect in the long run, some crooked politician had his hand in the holding company's legal maneuvering. Sad...
 
I'm honestly not surprised. I honestly never understood what people saw in them. I know back in the day they were fantastic guns. Problem is since I started buying guns they were relatively high priced to the competition and generally, from what I saw, the over all fit, finish, and quality was less than the competition. The only remington I ever owend was a 870 tactical. It was heavy, and the follower always stuck in the factory installed magazine extension. I ended up going mossberg, better fit and finish and lighter.
 
Wow, I just looked at Remington's website (I think for the first time) and I'm kinda shocked. No semi center fire rifles, no revolvers. Rimfire rifles are all North of 750. No lever guns?

I'm not real familiar with their pedigree (other than the 870), but I guess their financial woes must have killed any real R&D to keep up with the times.
 
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