Gunwerks Sued By Creditors

[antelopedundee]

I'm no friend of Welles Fargo and know only what I've read about this online. I will say that as a former loan officer for a large bank the claims made in the banks law suit sound so typical of a failing company, hiding or selling assets, moving cash etc., I've seen it dozens of times. However I've also seen many times that when legal actions are begun suddenly the customer becomes much more open to working with the bank to maybe get things back on track.
I will say that also that many times lenders bear some of the blame by pouring money into new ventures based on overly optimistic projections by enthusiatic entrepreneurs.

Do you ever recall funding a business loan where the money was controlled by a receiver from the git go? That is a receiver would collect all income and disburse expenses and not let some party to the business misappropriate the money.

 

[BenPerfected]

Do you think that Gunwerks will have any problems lining up a new bank?
Ben

 

[LaMan]

Do you ever recall funding a business loan where the money was controlled by a receiver from the git go? That is a receiver would collect all income and disburse expenses and not let some party to the business misappropriate the money.

There are any myriad of arrangements that can be done to excercise some control or at least monitoring of borrower performance and adherence to agreed upon loan terms. I never saw one with complete control by a "reciever" but frankly we would have never extended credit if we felt that insecure about the business plan or management. Personal guarantees for corporate debt are
generally worthless without actual mortgages, liens, escrow of personal funds etc.

If Gunwerks is going as well as the CEO claims in his letter than a workout or at least a new lender quite possibly could lead to success. This kind of money is the proverbial drop in the bucket to Welles Fargo so I doubt they are trying to make an anti-gun statement. Banks are one thing but the possible wasting of taxpayer dollars is something else.

 

[Dusty Stevens]

Im still rooting for them. We cant have too much good exposure in our hobby. Their exposure to the masses on tv etc is a good thing for them to keep on getting loans and operating

 

[46and2]

 

[JimT]

b. Borrower's failure to timely provide a borrowing base certificate and

supporting schedules, quarterly balance sheet and income statement, monthly operating

statements, and weekly cash flow forecasts,

c. Borrower's failure to achieve a minimum 1.25 to 1 Debt Coverage Ratio

for the period ending December 31, 2019,

d. SM Group's failure to provide a CPA reviewed financial statement, and

e. Borrower's failure to timely give Wells Fargo notice of an action against

the Borrower pending in San Diego, California relating to a patent in which Wells Fargo

holds a security interest.

 

[bobinpa]

At one time I felt the same way as many of you. I looked at what Gunwerks offered and what they charged and thought it was over priced. Since I have shifted into building rifles full time as 100% of my income, I now have first hand experience that has changed my mind. Almost every business out there has high margins in mark up. The every day stuff we buy is usually marked up over 100% by the time we buy it. Shop labor is over $100 an hour in most parts of the country. I think Gunwerks is how custom rifle building looks when normal business practices are applied to the custom rifle world. What your average smith is charging, provides him a living wage, not a profit to grow a company. Custom rifles are expensive, but if you put them into perspective compared to any custom US made precision products, its one of the best cost/value things left in my opinion. The reason is because the people in this business are passionate about it and profit is not the goal.

Very accurate statement. Most small business owners have a passion and start a business based on a skill without realizing what "overhead" actually costs which is why most small business owners only make a living. Some make a better living than others but not many make enough to actually accumulate wealth.

 

[Evan]

$100/hr shop rate is not the same as take home pay. I think a lot of folks forget that part of that 100/hr pays for the shop, equipment, accounting, insurance, customer service, warranty work, etc. Once all that comes out, that skilled craftsman might be making $20/hr if they're self employed and don't have a group of employees to defray that overhead. I doubt Gunwerkes' shop rate is that low though. I'd bet their rate is closer to 200 given their size. So each gun has at most 50 shop hours, if materials aren't considered. Pretty reasonable to me. If you have the knowledge and time to spec your own, source the components and work with a gunsmith you save some money, otherwise you pay more and let a knowledgeable company do it all for you. As many companies like Gunwerkes have demonstrated, there is a market of people who understand and value that. These people aren't stupid or lazy, nor have they been swindled. They merely prioritize their money and time differently.

That said I don't buy the conspiracy theories presented here. I think Gunwerkes might do well to pay their taxes and follow the requirements in their loan terms so that their creditors don't have to file lawsuits.

 

[Alex Wheeler]

$100/hr shop rate is not the same as take home pay. I think a lot of folks forget that part of that 100/hr pays for the shop, equipment, accounting, insurance, customer service, warranty work, etc. Once all that comes out, that skilled craftsman might be making $20/hr if they're self employed and don't have a group of employees to defray that overhead. I doubt Gunwerkes' shop rate is that low though. I'd bet their rate is closer to 200 given their size. So each gun has at most 50 shop hours, if materials aren't considered. Pretty reasonable to me. If you have the knowledge and time to spec your own, source the components and work with a gunsmith you save some money, otherwise you pay more and let a knowledgeable company do it all for you. As many companies like Gunwerkes have demonstrated, there is a market of people who understand and value that. These people aren't stupid or lazy, nor have they been swindled. They merely prioritize their money and time differently.

That said I don't buy the conspiracy theories presented here. I think Gunwerkes might do well to pay their taxes and follow the requirements in their loan terms so that their creditors don't have to file lawsuits.[/QUOT

Very true, thats the point I wanted to make

 

[SPQR70AD]

Too busy pocketing the money and letting the company go under

yes I have seen that many times. seems the modern way to do business. build up something sell stocks then loot it. these guys did not have stocks maybe but without paying all those loans they had to pocket a lot of money. spending tons of money on family hunting trips don't help. wells fargo is one to talk being they laundered dump truck loads of drug money got caught and paid a tiny fine as opposed to what they made.
gunwerks should have taken a page out of the Ruger manual where Ruger never borrowed a penny slowly built up paying all the bill with the money they made not borrowed

 

[SPQR70AD]

$100/hr shop rate is not the same as take home pay. I think a lot of folks forget that part of that 100/hr pays for the shop, equipment, accounting, insurance, customer service, warranty work, etc. Once all that comes out, that skilled craftsman might be making $20/hr if they're self employed and don't have a group of employees to defray that overhead. I doubt Gunwerkes' shop rate is that low though. I'd bet their rate is closer to 200 given their size. So each gun has at most 50 shop hours, if materials aren't considered. Pretty reasonable to me. If you have the knowledge and time to spec your own, source the components and work with a gunsmith you save some money, otherwise you pay more and let a knowledgeable company do it all for you. As many companies like Gunwerkes have demonstrated, there is a market of people who understand and value that. These people aren't stupid or lazy, nor have they been swindled. They merely prioritize their money and time differently.

That said I don't buy the conspiracy theories presented here. I think Gunwerkes might do well to pay their taxes and follow the requirements in their loan terms so that their creditors don't have to file lawsuits.

you have just gave the reasons why industry will NEVER come back to US being local state county and federal govts are against you. the reason China has 5 trillion output in industry compared to 1.4 trillion for the US is they don't have to worry about EPA OSHA gangster IRS lawyers insurance mafia workers comp etc. . that is why China can make a forged MIA ship it 5000 miles to Canada and the US before bans and sell it for $450 as opposed to 2000-2500 for US made. do not want to hear about slave labor being CNC machines do most of the work with a guy sitting in a room monitoring the machines

 

[Sniper338]

yes I have seen that many times. seems the modern way to do business. build up something sell stocks then loot it. these guys did not have stocks maybe but without paying all those loans they had to pocket a lot of money. spending tons of money on family hunting trips don't help. wells fargo is one to talk being they laundered dump truck loads of drug money got caught and paid a tiny fine as opposed to what they made.
gunwerks should have taken a page out of the Ruger manual where Ruger never borrowed a penny slowly built up paying all the bill with the money they made not borrowed

It happens all the time. Dirty business. See it alot with restaurants. They dont pay taxs, shut down, then reopen under another name

 

[SPQR70AD]

It happens all the time. Dirty business. See it alot with restaurants. They dont pay taxs, shut down, then reopen under another name

when I was in const in south Fla rotten builders doing a strip mall would get as much money as they could from the banks not pay anybody for months send the money to Bermuda then abandon the job.

 

[Rick300]

After seeing AND experiencing Wells Fargo business practices - I would believe Gunwerks WAY before I would believe Wells Fargo

 

[std7mag]

I had Wells Fargo for my first mortgage.
After a nasty divorce, and my first wife not signing off on the deed, it did unfortunately end up in foreclosure.

Believe me when i say, they bent over backwards to try to help me out!
With her name still on the deed, i couldn't get it refinanced!

Personally, i have nothing against Wells Fargo, we were both stuck in a crappy situation!