A gun seller who stocked up on inventory in case Hillary Clinton won the 2016 election has filed for Chapter 11 bankruptcy, Bloomberg reports.
United Sporting Cos. thought that a Clinton victory would result in a surge in demand. But after Donald Trump won in 2016, the company was left with the costs of a huge amount of unsold inventory.
Bloomberg reports that the company filed for Chapter 11 this Monday in order to protect itself from bill collectors, as it’s currently $270 million in debt. Sales reportedly started to drop off in 2018, according to court filings by CEO Bradley P. Johnson.
According to one of United’s creditors, Prospect Capital Corp., mismanagement by Wellspring Capital Management, the company’s largest equity owner, is to blame for the decline.
A few years ago, United was the largest distributor of firearms in the U.S., according to the objection. But Wellspring “cashed out” more than $183 million through dividend recapitalization deals in 2012 and 2013, then appointed fiduciaries who “grossly mismanaged the business and depleted all reserves necessary to weather the storms and the headwinds the business would face,” the dissenting lenders said.
Bloomberg points out that United isn’t the first firearms company to run into financial trouble as of late. Remington Outdoor Co. went bankrupt last year, along with Gander Mountain Co. and AcuSport Corp. Dick’s Sporting Goods Inc. has stopped selling firearms altogether.
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