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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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Copyright 2012 The Moderate Voice
  • The link in the article seems not to be working. Here it is in “longhand”.

    This one works for those who would like to see Cohan’s piece.

  • ordinarysparrow

    I like this as a strong and sane possibility..

    The company’s existing stockpile of guns — it has some $200 million in inventory according to the latest quarterly report — can be melted down and turned into plowshares, or at least tasteful monuments to the horrors of gun violence, and installed in places such as Newtown, Connecticut; Aurora, Colorado; Blacksburg, Virginia; Tucson, Arizona; Binghamton, New York; and Fort Hood, Texas.

    There is a blaring oversight here though, the Sikh Temple in Wisconsin should of been added to the above listing…

  • STinMN

    As much as I like the idea it would only be a temporary blip. Until you can start reducing demand for guns this idea won’t do much. There are too many small manufacturers that would step in to fill the void liquidating these manufacturers create. And personally I’d hate to own yet another orphaned product (I have a Saab) as I own both a Marlin rifle and a Remington shotgun.

  • sheknows

    Great idea! Mayors against Illegal Guns has some real support from several wealthy celebrities. It would take alot of money to pull it off and leaves only altruistic buyers who don’t want a return on their investment.
    Hopefully people like Koch Bros. don’t step in first and offer more. A bidding war could blow a ray of hope out of the water.

  • STinMN,

    To your supposition, “There are too many small manufacturers that would step in to fill the void…” my thought is different. Cohan in his piece raises the same point you do. But, having spent some recent time in the business world as general counsel, I can tell you that financial institutions are very skittish these days. I’m not sure small manufacturers could get the capital financing they would need to significantly expand production. This may be especially true with gun control measures as an ongoing series of proposals from Congress and a President committed to gun control.

    Your second point, that you own both a Marlin and a Remington raises an additional possibility. If Freedom Group were liquidated that could include not licensing patents to produce replacement parts. As firearms of those makes wear out or break, there would be a shortage of replacement parts to repair or maintain them. That could result in further reduction of firearms in public hands by attrition. Sorry to suggest something that would affect you personally, but whatever is legal and works. Maybe you’d consider making that sacrifice for the greater good.

  • EEllis

    Bushmaster makes barrels only purchasing the rest from other manufactures to make their ar15. Of course the barrels are the limiting factor since anyone with a c&c and the right program can make almost any other part. A small garage sized shop can machine receivers from blocks of aluminum. Right now there are over 40 established and significant producers of the ar15.

    Also would this include shutting production of all guns from these companies? Remington makes the 870 pump shotgun, the most popular police shotgun by quite a margin. Is that a gun that people want to stop making? What about the lever action carbines? You know the old “Cowboy guns”. There seems to me a lot more in the way of good can be done with almost a billion dollars than make to just make a gesture but it’s their money so………..

  • dduck

    ES, I know some of us want to get rid of that pesky 2nd amendment, but there is no getting rid of the law of supply and demand.
    BTW: the two plus BILLION wasted on the recent presidential campaign could buy all of the bigger guys and perhaps all the smaller ones that would come in.
    Absent a new law, foreign manufacturers would also step in to fill the demand side. All, in all, an interesting idea, fit for a great movie scenario, but one that probably wouldn’t work well.
    AK47, anyone. Keep truckin’.

  • ShannonLeee

    Interesting idea, but the market is too valuable. Other manufacturers would immediately fill the void.

  • zephyr

    Dd, I don’t know anyone personally who wants to do away with the 2nd amendment but I know a lot of people who would like a more rational interpretation of it.

  • STinMN


    I’d be more than happy to contribute to the cause but at the current rate that I use these guns they’ll last almost indefinitely so it really wouldn’t be much of a sacrifice.

    I was talking to an attorney friend of mine today and he mentioned one thing that could limit manufactures from stepping in to fill the void – revoke gun manufacturers exemption from product safety regulation and tort limits.

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