Three prominent North Carolina banks have agreed to provide 54 percent of the debtor-in-possession financing to Remington Outdoor Co. to aid its exit from Chapter 11 bankruptcy protection by the end of May.
According to bankruptcy court records, Bank of America Corp. and Wells Fargo & Co. are among three banks providing $43.23 million, while BB&T Corp. is among three banks providing $18.62 million.
Altogether, seven financial institutions are supplying $193 million. The debtor-in-possession financing converts into a three-year, asset-based debt loan upon Remington exiting bankruptcy.
The company, with about 150 employees in Rockingham County, announced its bankruptcy plans Feb. 13 and formally filed March 25. The updated bankruptcy plans, announced Wednesday, came hours after the U.S. bankruptcy court in Delaware confirmed the company’s reorganization plan.
Remington has been plagued by lawsuits filed following the 2012 Newtown, Conn., school shooting in which 20 first-graders and six educators were killed. The assailant used a Remington-made rifle.
Bank of America is among a small group of financial institutions that have pledged since the Florida school-shooting tragedy in February to cut back on lending to the industry sector.
Anne Finucane, Bank of America’s vice chairman, told Bloomberg TV that “it is not our intent to underwrite or finance military-style firearms on a go-forward basis.”
Brian Moynihan, Bank of America’s chairman and chief executive, told shareholders at its annual meeting April 25 the bank is altering its policy in part because more than 150 employees “directly lost a relative in the shootings in the last couple years.”
Wells Fargo: We plan
BB&T and Wells Fargo have said they don’t comment specifically on customer relationships.
“Any solutions on how to address this epidemic (mass shootings) will be complicated,” Wells Fargo said. “This is why our company believes the best way to make progress on these issues is through the political and legislative process.
“We plan to engage our customers that legally manufacture firearms and other stakeholders on what we can do together to promote better gun safety for our communities.”
In June 2016, Letitia James, public advocate for the city of New York, sent a letter to the chief executives of BB&T and five other institutions. The letter asked them to end their financial backing of Sig Sauer Inc. of Newington, N.H.
U.S. law-enforcement officials have said a Sig Sauer MCX rifle was used in the mass shooting at a gay nightclub in Orlando, Fla., that killed 49 people and wounded 53. Orlando is a key hub in Florida for BB&T.
“At a time when many Americans express outrage at the behavior of big banks in underwriting bad practices, I urge you to reconsider your role as a financier of companies that manufacture weapons that are used by mass murderers,” James wrote.
At that time, the six banks participated in providing $178 million in loans and a credit line to privately held Sig Sauer in December 2015 for expansion initiatives, according to James’ office and several media reports.
Kelly King, BB&T’s chairman and chief executive, sent James a three-paragraph letter in which he said that “while your points are well taken, BB&T has a long-standing policy to protect the privacy of our clients, as required by law, and we cannot address the details of our lending relationships.”
However, BB&T Capital Markets’ Corporate Banking group said on June 15, 2015, that it had closed $280 million in credit facilities for Smith & Wesson Holding Corp., the former corporate name for American Outdoor Brands. BB&T committed $60 million as the joint lead arranger and joint book runner.
Top lender to gun makers? Wells Fargo
Wells Fargo & Co. holds the top market share for lending to U.S. firearms manufacturers over the past five years, according to a Bloomberg News analysis released in March.
The report found that Wells Fargo has lent at least $431.1 million to firearms manufacturers since the mass shooting in Newtown, Conn., in December 2012.
Bloomberg reported that some of Wells Fargo’s relationship with the National Rifle Association is tied to loans provided by banks it had bought, including First Union Corp. via Wachovia Corp.
That includes Wells Fargo creating a $28 million line of credit for the NRA and operating its primary accounts, financial documents show.
Bank of America Merrill Lynch was tied for fourth at $273.6 million; BB&T tied for ninth at $157.5 million; and PNC Financial Services Group, tied for 11th at $148.6 million.
Bloomberg said the financing includes bonds and loans provided to American Outdoors Brands, Remington, Sturm Ruger & Co. and Vista.