Six hundred or so employees at Remington Arms are being furloughed, effective this week, from the gun manufacturing plant in Ilion. Ilion Mayor Brian Lamica confirmed the furloughs.
The local gun making operation is owned by the Remington Outdoor Company. The company filed for Chapter 11 bankruptcy in July of this year. It was the second bankruptcy filing for the company since 2018.
Remington Arms was purchased in 2007 by Cerberus Capital Management, a private equity company. In 2015, Cerberus expanded the company by renovating a former auto making plant in Huntsville, Alabama. Finances associated with Cerberus and the holding company it created to purchase Remington led to the 2018 Chapter 11 filing. As a result of the 2018 bankruptcy, the ownership of Remington Arms was transferred to its debt holders, which included investors Franklin Resources and JP Morgan Chase & Company. In that bankruptcy Remington also took $775 million dollars of debt off its books.
Still, Remington had to deal with high interest debt and the uncertainty of a high profile lawsuit stemming from the 2012 Sandy Hook shooting where a Remington Bushmaster rifle was used to kill 20 people, most of the victims being school children.
According to the Wall Street Journal, Franklin Resources has lost about $250 million dollars in its Remington operation. Franklin is the majority owner of Remington Outdoor. The decision to file a second Chapter 11 bankruptcy came from Remington executives. Franklin has the power to influence the auction for the company, that is going on now.
At one time, this past summer, there were talks between Remington and the Navajo Indian Nation for the purchase of the company. Those talks fell through.
Earlier this month, a bid of $65 million dollars was made by JJE Capital Holdings to purchase Remington Outdoor’s ammunition operations. The status of that sale is contingent of the auction that is ongoing. A court hearing on the bankruptcy auction is set for Tuesday morning in Alabama.