Remington Postpones Bankruptcy as BofA Hands Off Agent Role
Remington Postpones Bankruptcy as BofA Hands Off Agent Role
(Bloomberg) -- Remington Outdoor Co., the gunmaker headed for bankruptcy, postponed its court filing deadline by one week as Bank of America Corp. stepped away from a key role in the turnaround plan.
The Chapter 11 case will be filed by March 14, instead of the previously targeted March 7, according to an amendment posted on Remington’s website Monday. The company had said it would start solicitation for the plan by March 5, but that’s been delayed until March 12, according to the document.
The amendment also showed that BofA, the second-largest U.S. lender, is no longer the administrative agent to Remington’s term loan lenders, with newly formed Ankura Trust Co. named as BofA’s successor. Ankura, based in New Hampshire, specializes in distressed and default situations, according to a Jan. 30 statement. It’s led by David Sawyer, a former distressed-debt and hedge-fund investor whose career included stints at Barclays Plc and Silver Point Capital, his company biography shows.
Remington, controlled by Stephen Feinberg’s Cerberus Capital Management, said in February it would seek court protection from creditors after reaching a deal with lenders that gives them ownership of the firearms maker. The plan was dated Feb. 12, just days before the school massacre in Parkland, Florida, set off a new wave of national debate over restricting gun sales.
Representatives for Remington, based in Madison, North Carolina, and New York-based Cerberus didn’t respond to messages seeking comment. James McGinley, named as Ankura Trust’s chief operating officer in the statement, and a representative for Bank of America declined to comment.
Inventory Buildup
Plans call for a prepackaged reorganization to be filed with the U.S. Bankruptcy Court in Delaware. A Chapter 11 filing lets a company stay in business while it works out a plan to pay creditors and revive the business.
Remington’s fortunes took a hit along with other gunmakers after the election of President Donald Trump, a self-proclaimed “true friend” of the industry, eased customer concerns about losing access to weapons. Sales plummeted, and retailers stopped re-ordering as they tried to cut unsold inventory that they built up in anticipation of a Hillary Clinton presidency.
The company is also grappling with a heavy debt load. The acquisition spree that turned Remington into a firearms-industry Goliath left it with almost $1 billion in debt, which it plans to reduce through the bankruptcy process. BofA is still considering helping to finance Remington’s turnaround, according to a person with knowledge of the situation, who ask not to be identified discussing confidential matters.
The deal takes place under a national glare caused by the Florida shooting, which has spurred one of the strongest pushes for gun control in years. Companies such as Avis Budget Group Inc. and United Continental Holdings Inc. became the objects of consumer wrath for affinity deals with the National Rifle Association. Other firms, including in finance, are looking to avoid the same fate.
To contact the reporters on this story: Eliza Ronalds-Hannon in New York at eronaldshann@bloomberg.net, Laura J. Keller in New York at lkeller22@bloomberg.net.
To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Kenneth Pringle
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