A person holds a Remington Outdoor Co. Model 700 rifle for sale at a gun store in Orem, Utah, U.S., on Thursday, Aug. 11, 2016.George Frey | Bloomberg | Getty Images
The Remington Arms Co. appears on the verge of being sold off in pieces following its second Chapter 11 bankruptcy filing in just over two years.
It is an inauspicious fate for the 204-year-old company, which bills itself as America’s oldest gun manufacturer. But civil liability claimants who helped drive the company to this point allege that Remington’s attempt to auction itself off is deliberately crafted to deny them the compensation they say they are owed.
The federal judge overseeing the bankruptcy case, Clifton R. Jessup in Decatur, Alabama, has scheduled a hearing for Tuesday on whether to approve the process, which would see Remington’s various businesses — which operate under the umbrella Remington Outdoor Co. — auctioned off as soon as Sept. 8.
Among those objecting most strenuously to the proposal are the families of nine of the 26 victims of the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut, which was carried out by a gunman using a Remington-made Bushmaster AR-15 rifle.
The families sued Remington in 2014 alleging that the company’s marketing of the assault-style rifle led to the attack. Last year, the Supreme Court cleared the way for the suit to proceed. Remington’s proposed bankruptcy auction — which aims to sell off parts of the company “free and clear” of liabilities — is silent about the lawsuit. The families allege that is intentional.
In a court filing on Aug. 7, the families said the proposed fast-track auction would “prevent Remington from ever answering for its role in the wrongful marketing of the weapon and that marketing’s causal role in the devastating loss of life at Sandy Hook Elementary School.”
They are asking the judge to slow down the process and to give liability claimants like them a seat on the official committee of unsecured creditors, which will help steer the bankruptcy process.
Remington said it will let the court decide whether to give the families a seat on the committee, but the company said the families’ liability claims should be decided later.
“This is not the time nor the process for addressing the merits of the Sandy Hook Plaintiffs’ claims,” the company said in a court filing on Friday.
Remington attorneys did not respond to emails from CNBC seeking a comment.
Link below but Don’t bother going to it.