One of the most feared nightmares of any Ohio company is the reality of needing to file for bankruptcy when a major bump in the road hurts sales and withholds profits. Many companies go to great lengths to protect against the financial pitfalls that are so notorious for leading to bankruptcy filings. However, there are times when a seemingly wise decision ends up backfiring when circumstances fluctuate due to consumer demand, changes in the economy or problems with organizational processes.
In a recent example, the popular gun maker Remington has prepared to file for bankruptcy after failing to sell a major amount of inventory. The problems stemmed from the company’s decision to invest in surplus inventory in anticipation of the 2017 presidential election. If Hilary Clinton was voted into office, the retailing giant foresaw a dramatic increase in gun sales. However, when Clinton’s opponent, Donald Trump won, the surge in a demand for guns never happened and resulted in excessive unsold product sitting on stock shelves.
Remington plans to continue operating while taking significant efforts to get the company’s organizational processes back in check and paying back creditors. A debtor-in-possession loan was granted to the company to facilitate operations during bankruptcy filings. The amount of the loan was $100 million.
If a company has encountered a problem that puts their financial stability and success in grave danger, they may wish to hire an attorney. A professional can provide informative guidance on bankruptcy filings and provide direction throughout the legal process.
Source: CBS News, “Remington set to file for bankruptcy,” Kate Gibson, Feb. 12, 2018
