13-07-2006, 01:51 PM
High-end firearms manufacturer Dakota Arms of Sturgis, South Dakota has filed for Chapter 11 bankruptcy protection. The petition for Chapter 11 bankruptcy protection was filed July 6 with the U.S. Bankruptcy Court in the District of Minnesota.
It should be noted that a Chapter 11 bankruptcy filing is not tantamount to the closure and liquidation of the company. Rather, it is a request to the court that a company be granted what is, in effect, a breathing period from creditors so as to allow the company to reorganize itself for the intent of remaining in business. Several notable American companies including Chrysler Motors and others, have used Chapter 11 filings in order to allow the company to restructure debt and simultaneously continue operations under court supervision or detailed reorganization plans.
Dakota Arms manufactures a line of high-end, high-performance rifles, from single shot hunting rifles to the .338 Lapua Longbow tactical rifle, widely regarded as one of the world's best precision military weapons.
In a release, Dakota Arms described the filing as being "in the best long-term interests of Dakota Arms' customers, creditors and employees because it will allow the company to continue operating as it resolves its financial challenges. "
Dakota Arms' management team will remain in place to implement the plan of reorganization, and the company is negotiating debtor-in-possession (DIP) financing that would supplement existing capital. Company officials expect to emerge from bankruptcy within six to twelve months.
"We want to assure our customers, our dealers and our vendors that we are conducting business as usual. The sales team will continue to take orders and deposits. The manufacturing team will continue to produce the high-quality firearms that carry the Dakota name," says Dakota Arms president Charlie Kokesh. "We do not expect any disruption to customer service or quality control as a result of this filing."
"This is a responsible step that will ultimately strengthen Dakota Arms as we move forward," Kokesh said. "The rationale behind this filing is that Dakota Arms, one of America's leading manufacturers of quality firearms, will be able to continue to produce the world's most accurate and reliable rifles for hunters and sportsmen who appreciate the very best. In the meantime, there will be no loss of jobs in Sturgis, we will be honoring all customer deposits, and we will continue to make payments to all of our vendors, especially all of the businesses in the Black Hills."
According to Julie Anne Overton, representing the privately-held company's primary investor, difficulties with a creditor led to the filing decision.
The company's initial hearing before the District of Minnesota Banruptcy Court will be this Wednesday, July 12. At that time the Court will hear preliminary motions and take steps toward the appointment of a bankruptcy trustee.
It should be noted that a Chapter 11 bankruptcy filing is not tantamount to the closure and liquidation of the company. Rather, it is a request to the court that a company be granted what is, in effect, a breathing period from creditors so as to allow the company to reorganize itself for the intent of remaining in business. Several notable American companies including Chrysler Motors and others, have used Chapter 11 filings in order to allow the company to restructure debt and simultaneously continue operations under court supervision or detailed reorganization plans.
Dakota Arms manufactures a line of high-end, high-performance rifles, from single shot hunting rifles to the .338 Lapua Longbow tactical rifle, widely regarded as one of the world's best precision military weapons.
In a release, Dakota Arms described the filing as being "in the best long-term interests of Dakota Arms' customers, creditors and employees because it will allow the company to continue operating as it resolves its financial challenges. "
Dakota Arms' management team will remain in place to implement the plan of reorganization, and the company is negotiating debtor-in-possession (DIP) financing that would supplement existing capital. Company officials expect to emerge from bankruptcy within six to twelve months.
"We want to assure our customers, our dealers and our vendors that we are conducting business as usual. The sales team will continue to take orders and deposits. The manufacturing team will continue to produce the high-quality firearms that carry the Dakota name," says Dakota Arms president Charlie Kokesh. "We do not expect any disruption to customer service or quality control as a result of this filing."
"This is a responsible step that will ultimately strengthen Dakota Arms as we move forward," Kokesh said. "The rationale behind this filing is that Dakota Arms, one of America's leading manufacturers of quality firearms, will be able to continue to produce the world's most accurate and reliable rifles for hunters and sportsmen who appreciate the very best. In the meantime, there will be no loss of jobs in Sturgis, we will be honoring all customer deposits, and we will continue to make payments to all of our vendors, especially all of the businesses in the Black Hills."
According to Julie Anne Overton, representing the privately-held company's primary investor, difficulties with a creditor led to the filing decision.
The company's initial hearing before the District of Minnesota Banruptcy Court will be this Wednesday, July 12. At that time the Court will hear preliminary motions and take steps toward the appointment of a bankruptcy trustee.
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