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Gunmaker Remington goes bankrupt for second time in two years

Background checks show surge in gun sales
Background checks show surge in gun sales 04:29

Remington Arms, the nation's oldest gunmaker, has declared bankruptcy for the second time in as many years.

Remington first sought bankruptcy protection in 2018 after reporting nearly $1 billion in debt. Although the company exited court supervision that same year, it remained weighed down by lawsuits and retail sales restrictions following the 2012 Sandy Hook school massacre

The company is filing for Chapter 11 protection even as firearm sales have jumped about 400% this year. Although the Navajo Nation had been in talks to purchase Remington, talks broke down last week, the Wall Street Journal reported. Remington has assets and liabilities of between $100 million and $500 million, according to court filings

Before a surge in gun sales in 2020 amid the coronavirus pandemic and nationwide protests over the death of George Floyd, revenue for firearm manufacturers had slumped because gun owners are not as compelled to stockpile weapons out of fear that Congress will tighten gun control laws.

But the past three years under President Donald Trump have been volatile, fueled in part by a mass shooting in Las Vegas and other high-profile mass killings that have led retail chains to restrict sales, or removed guns completely from stores. Walmart in September said it would not sell ammo after a mass shooting in its El Paso, Texas, store left 22 dead.

Ghost Guns: Build-it-yourself firearms 13:36

About 3.9 million background checks were conducted last month, according to the FBI. That's the most since the system was created in November 1998. Background checks are the most reliable metric used to measure gun sales.

Remington's bankruptcy also comes with a lawsuit scheduled to go to trial in September 2021. Families of the victims in the 2012 Sandy Hook school shooting filed a lawsuit in 2016 arguing Remington was negligent in selling the weapon used in the massacre.  

The families have been granted access to the computer of the shooter. The families are looking for evidence of the shooter's exposure to advertisements for weapons. They say Remington violated the Connecticut Unfair Trade Practices Act by marketing its Bushmaster XM15-E2S, an AR-15 style weapon, to civilians. The weapon was used to kill 20 children and six adult staff at the school.

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