Remington and bankruptcy

[JimT]

I just KNEW you could find a way to blame Trump! Simply amazing

You appear to be not as astute as jelenko.

 

[JimT]

If this was the case why did the other gun companies do just fine under trump?

Sturm, Ruger Revenue 2010-2024 | RGR

Sturm, Ruger revenue from 2010 to 2024. Revenue can be defined as the amount of money a company receives from its customers in exchange for the sales of goods or services. Revenue is the top line item on an income statement from which all costs and expenses are subtracted to arrive at net income.

www.macrotrends.net

 

[JimT]

I didn't read it that way. Trump's effect was to reduce gun sales overall.
That said, it doesn't explain what caused Remington to have to declare bankruptcy when the other gun mfg's didn't.

Clearly, the amount of debt Remington was carrying was too much for them with the reduced sales.

I think the question is: What caused/drove the debt?

Quote from the New York Times author you guys are putting so much faith in:

“In April 2012, Cerberus did something fateful, which probably seemed smart at the time. It had Remington borrow hundreds of millions of dollars and use it to buy the holding company’s debt, effectively transferring responsibility for the principal and the interest payments onto Remington.”

Again, the people who lent this money did their due diligence and financial modeling and, obviously, were comfortable lending Remington the money involved.

However, I will confess in the 12 years I worked for one of the largest international accounting firms in the World, I came to the conclusion that the worst/dumbest business people were in the banking and commercial real estate industries. A conclusion that is continually reinforced to this very day.

 

[ben lurkin]

If this was the case why did the other gun companies do just fine under trump?

That one is pretty easy. Cerebrus created a shell company to run Remington at arms length. Shell company serves as a vehicle to extract the original investment made in Remington by saddling them with a loan to pay off Cerebrus. With the downturn in revenue, Remington couldn’t just cut back production to remain in the black as they now had a loan to service whereas Ruger, et al, did not. Classic corporate raider strategy to protect their capital, except they failed to account for the firearms market downturn when Hillary wasn’t elected. Even so, they’ve covered their bets via the “chargeback” to Remington.

QED