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Old 07-31-2020, 11:12 AM
Big Uncle
Nontypical Buck
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Join Date: Dec 2009
Posts: 1,780

This is a popular topic lately. The anti-gun crowd is cheering and the internet rumor mill is in full swing. As most of us do not know very much about the process perhaps some discussion using small words might be helpful.

A very important thing to know is that this is a Chapter 11 filing, not a Chapter 7. A Chapter 11 allows for reorganization and negotiations with creditors. A Chapter 7 is a liquidation. There is a lot of gamesmanship in a filing of this type. Will creditors be willing to play ball? People who deal with these issues are well aware that pushing too hard could result in a liquidation that would almost guarantee that the creditors will walk away with only "pennies on the dollar" or completely emptyhanded.

Selling assets (including intellectual property such as patents and trade names) could be a result leaving an empty bucket for the Sandy Hook plaintiffs. The SCOTUS is allowing those civil suits to go ahead in the Connecticut courts and the outcome is very unclear but currently there is no liability. If the Sandy Hook suits are successful it will almost certainly open the floodgates for other suits to be filed against other gunmakers. Defending the suits will be very expensive for Remington whether they win or lose. This might be a good time to sell the operating assets and let a new management company continue production. The current shareholders, the creditors, the Sandy Hook plaintiffs, the firearms industry, and we sportsmen all have a lot at stake.

There is much going on that only the insiders would know, and there are many moving parts. I am rooting for Remington to survive for another 200 years and for the firearms industry to survive the legal and political attacks. Obviously not everybody shares those sentiments.

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