The Remington Outdoor Company, one of America’s largest firearm and ammunition manufacturers, plans to file for Chapter 11 bankruptcy protection after reaching a deal Monday with its creditors, according to multiple reports.
Company officials said in a news release that a prepackaged reorganization plan will be filed with the U.S. Bankruptcy Court in Delaware. The deal will give control of the company to its lenders, Bloomberg News reported.
Remington seeks to lower its $950 million debt load, Reuters reported. The company’s executive chairman, Jim Geisler, said in a statement that "difficult industry conditions make today’s agreement prudent."
"I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage," he said.
Officials with Remington, the maker of the Bushmaster AR-15-style rifle used in the Connecticut shooting that left 20 first-graders and six educators dead in 2012, said the agreement with lenders will reduce its debt by about $700 million and add about $145 million in new capital.
The company was cleared of any wrongdoing in the 2012 shooting, but investors repulsed by the massacres distanced themselves from the company's owner, investment firm Cerberus Capital Management.
The company’s debtors include JPMorgan Asset Management and Franklin Templeton Investments, Reuters reported. They will trade their debt holdings for equity in Remington as part of the deal unveiled Monday.
A bankruptcy filing under Chapter 11 allows a company to reorganize and stay in business as the company works to repay debtors. Officials with Remington said in a news release Monday that the company will continue to operate as normal as the restructuring process gets underway.
"Importantly, the fundamentals of our core business remain strong," Reminton CEO Anthony Acitelli said in a statement. "We have an outstanding collection of brands and products, the unqualified support of a vibrant community across the industry and a deep and powerful culture. We will emerge from this process with a deleveraged balance sheet and ample liquidity, positioning Remington to compete more aggressively and to seize future growth opportunities."
The Associated Press contributed to this report.