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Posted by on Dec 31, 2012 in At TMV, Economy, Law, Politics, Society | 10 comments

Purchase, Then Liquidate, Gun Makers

Now here’s a creative idea. It seems that the world’s largest collection of gun manufacturers, Freedom Group, is up for sale. Freedom Group is a conglomerate that has been purchasing gun makers for some time. Among its acquisitions are Bushmaster and Remington Arms. Bushmaster is the company that manufactures the AR-15, the type of gun used in the Sandy Hook massacre. See the image above for a more extensive list of holdings.

Bloomberg’s William Cohan has presented the following interesting proposal in an editorial today . Wealthy individuals could use their resources to purchase Freedom Group then shut it down and, in the process, destroy the existing inventory of the gun manufacturers under Freedom Group’s umbrella.

Cohan points out that this would need to be a cash purchase. Because the purpose of the purchase is to liquidate the companies, financing would be unavailable. One option involves wealthy individuals using personal wealth to purchase Freedom Group for cash. A second option is a syndicate that would permit those who would like to reduce the number of firearms available to invest for the purpose of purchasing and liquidating Freedom Group and its subsidiary companies.

There may be an additional option not mentioned by Cohan in his article. Once inventories have been liquidated, i.e. destroyed, there may be an ongoing use for maintaining the corporate identity. To the extent that there may be disputes or potential disputes, the companies might be kept alive for the purpose of prosecuting patent infringement suits against other gun manufacturers. Using this vehicle could impact the broader gun industry above and beyond the simple purchase and liquidation of the companies under Freedom Group’s umbrella.

With gun control unlikely to pass both houses of Congress anytime soon, resort to lawful private means within the marketplace may be an attractive alternative. Question. If you favor reducing the number of guns available to members of the public, would you purchase stock in a company or syndicate whose sole purpose was to purchase firearms manufacturers and liquidate them? In answering, understand that you would receive no return on your investment.

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