A gun seller that stocked up assuming a victory ahead of the 2016 election filed for Chapter 11 bankruptcy this week, according to Bloomberg.
United Sporting Cos., which sells various outdoor equipment in addition to guns, banked on a Clinton victory to drive a surge in demand, but ’s win left it with high carrying costs for unsold inventory and sales below expectations, according to a court declaration by CEO Bradley P. Johnson.
United filed for Chapter 11 bankruptcy on Monday to protect itself from creditors, according to Bloomberg. The company has $270 million in debt and reported a steep drop in net sales in 2018, going from an average of $885.3 million from 2012 to 2016 to $557 million last year, according to the publication.
In an objection to the filing, one of United’s creditors, Prospect Capital Corp., said mismanagement by Wellspring Capital Management, the company’s largest equity owner, was to blame for the decline, according to Bloomberg.
At the beginning of the decade, United was the biggest distributor of firearms in the U.S., but after Wellspring made a series of recapitalization deals to “cash out” more than $183 million in 2012 and 2013, the firm appointed fiduciaries who “depleted all reserves necessary to weather the storms and the headwinds the business would face,” the objection states, according to Bloomberg.