A Farewell to Arms? A.D.K. Arms Files For Chapter 11,Illinois

Cash gun
iStock.com/STILLFX

ADK Arms, Inc. has filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court, Northern District of Illinois (case number 17-21679). A.D.K. Arms sells a range of firearms components for the AR-10 and AR-15 to the gun industry.

AD.K. Arms is an affiliate company of Advanced Precision Manufacturing Inc. According to court documents, ADK Arms acts as a go-between for customers and Advanced Precision Manufacturing. ADK Arms takes orders, purchases products from Advanced Precision Manufacturing, and ships the parts to customers.

The recent filing isn’t a total surprise. In June, Advanced Precision Manufacturing filed for Chapter 11 bankruptcy.

According to filings made by ADK Arms, the company has assets and liabilities in the range of $100,001 to $500,000. Advanced Precision Manufacturing, meanwhile, reported assets and liabilities in the $1.0-million to $10.0-million range.

Advertisement

Both bankruptcies appear to have been promoted by actions taken by Midwest Community Bank. According to the filings, Advanced Precision Manufacturing allegedly owes Midwest Community Bank nearly $4.0 million, while ADK Arms owes more than $1.8 million.

A Chapter 11 bankruptcy proceeding allows a company to reorganize its business to address its debts and continue operations. A Chapter 11 bankruptcy proceeding does not mean ADK Arms is going out of business; rather, it is restructuring its debts with the intent of paying off creditors.

A.D.K. Arms is not the only armsmaker that has run into financial trouble of late, with gun maker MG Industries filing for Chapter 7 bankruptcy to resolve its debts. According to filings, MG has between one and 49 creditors and assets and liabilities between zero and $50,000.

The Bangor, Maine-based company was started by Mack Gwinn, who also founded Bushmaster Firearms International LLC. The company is known for its “Hydra” series of easily modifiable AR-style firearms. Despite the filing, there is no mention of anything on the company’s web site.

In the 1970s, Gwinn founded Gwinn Firearms, which later evolved into Bushmaster. The company was later acquired by Remington Outdoor Company, Inc.

Unlike Chapter 11, in a Chapter 7 bankruptcy proceeding, the court appoints a trustee to oversee the case, sell the assets, and distribute the money to creditors who filed claims. The owner of MG Industries will be able to keep enough money to start again if they wish.

Sources:

Illinois Northern Bankruptcy Court Case 1:17-bk-21679 – A.D.K. Arms,” Northern CourtDrive, last accessed July 31, 2017.

About Us,” A.D.K. Arms, Inc., last accessed July 31, 2017.

About Us,” APMI, last accessed July 31, 2017.

Voluntary Petition for Non-Individuals Filing For Bankruptcy,” District of Maine, last accessed July 31, 2017.

Home,” MGI Industries, last accessed July 31, 2017.

Advertisement

Categories: Bankruptcies, News
Tags:

Advertisement