NEW YORK (Reuters) - Remington Outdoor Company Inc won approval for its bankruptcy plan on Wednesday, paving the way for the arms maker to slash debt, boost its cash position and better weather the uncertain climate for firearms in the United States.
Remington filed for bankruptcy in March with a deal in hand to cut its debt by about $775 million, a little more than one month after a school shooting in Parkland, Florida.
The shooting sparked protests and a wave of retailers and corporations to limit sales and transactions relating to firearms. Mass discounter Walmart Inc (WMT.N), which Remington is reliant on for sales, said it would stop selling guns to people under 21 years old.
Remington will exit bankruptcy as soon as this month, with some of its creditors, including JPMorgan Chase & Co(JPM.N) and Franklin Advisors, taking ownership stakes in the company in exchange for forgiving debt. Cerberus Capital Management L.P., Remington’s current private equity owner, will give up its equity in the restructuring.
“I’m satisfied there’s sufficient creditor support to win confirmation,” Judge Brendan Shannon said in U.S. Bankruptcy Court for the District of Delaware. Remington filed a so-called pre-packaged bankruptcy, meaning it had largely won the support of its creditors before it filed in court.
Remington’s creditor committee, composed of a representative for its pension and plaintiffs in cases against the company for gun injuries and deaths, supported the bankruptcy plan, an attorney for the group told Shannon.
The company’s bankruptcy plan allows for lawsuits against it to continue, including