Cerberus Stuck with The Freedom Group. For Now.

Connecticut State Police Release Sandy Hook Report

About two years go, in the politically charged aftermath of the Sandy Hook slaughter, Cerberus Capital Group promised to sell The Freedom Group. Cerberus made the pledge to deep-six the non-synergistic agglomeration of firearms-related companies under pressure from the California State Teachers’ Retirement System (CalSTRS). The teachers were mortified – mortified I tell you! – by the fact that a portion of their gi-normous pension fund was vested with the money men who owned the company that manufactured the Bushmaster rifle the Newtown killer used to murder 26 people [above]. Unfortunately for the educators, no one wanted to buy The Freedom Group. As time went on . . .

The Freedom Group continued to shed value. They’d already run the Marlin brand into the ground. Suppressor manufacturer AAC was/is headed in the same direction. Remington settled with litigants injured by defective triggers (for an undisclosed number of millions), and then issued a massive recall to fix the problem. Their R51 handgun was a complete dog. And the post-Newtown gun-buying boom went bust.

Bottom line: Cerberus failed to live up to its promise to sell The Freedom Group, which continues to tank. Nor did it honor a subsequent pledge to re-jigger things so that the PC-minded CalSTRS could shed ownership of The Freedom Group without bailing from the Cerberus mothership.

Fortune brings up to speed with the CalSTRS kerfuffle:

So while Cerberus continues to be open to an exit — either partial or complete — there seems to be little belief that it will come before the business regains its footing. In the meantime, LPs [Limited Partners] like CalSTRS are unwilling investors.

“CalSTRS has requested and continues to push our partner, Cerberus, to sell holdings of Remington Outdoors from the investment pool in which CalSTRS is a limited partner,” said system spokesman Ricardo Duran. “However, despite CalSTRS’ continued pressure and Cerberus’ earnest efforts, Cerberus has not been able to sell the holdings, or to find a way out of Remington Outdoors to investors like CalSTRS. You will also notice, CalSTRS has not made additional investments into Cerberus funds since 2012.”

It is unclear if CalSTRS has attempted to sell its entire interests in Cerberus funds via the secondary market.

A Cerberus spokesman declined to comment.

As we said right from the git-go, it’s only a matter of time before Cerberus decides to cut bait and fish, breaking up The Freedom Group to sells its constituent parts. Which are now worth a lot less than they paid for them, but a lot more than nothing. We look forward to the day when careful caretakers can restore these storied brands to the former glory.

comments

  1. avatar emfourty gasmask says:

    It would be neat if FNH or SigSauer looked into some of the off-brands when Cerberus inevitably breaks this whole Freedom Group apart.

    I really do love my DPMS LR-308 alot and it has been an awesomely reliable rifle.

    1. avatar ropingdown says:

      I’d like to see FNH pick up Marlin.

      1. avatar SnJohnson says:

        I’d love to see ANYONE pickup Marlin, provided they take care of it. Heck, it’d be nice if they could rise from the ashes like Windham Weaponry.

    2. avatar GS650G says:

      +1 on the DPMS LR308. I’ve had mone for over 6 years and still like it.

  2. avatar FedUp says:

    Why not make a Freedom Firearms Corporation, transfer Freedom Group’s assets to it, and give the stock to the partners of Cerberus?
    The new stock probably would have done fairly well a year ago. I’m not so certain about now.

  3. avatar Independent George says:

    Nobody’s going to buy the whole conglomeration – there’s too much liability and not enough assets. Breaking them up and selling them piecemeal makes sense, but what do any of those subsidiaries have that’s of any value to a buyer? AAC probably has some good IP remaining, and it makes sense for SIG to buy it out (Brittingham is probably cackling right now). What else is out there? The damage is already done.

    1. avatar Geoff PR says:

      The original owners might buy ’em back at pennies on the dollar and bring them back to profitability and sell ’em again.

      This time to someone who knows how to run a gun company.

    2. avatar tk says:

      “Worlds are colliding!”

  4. avatar IdahoPete says:

    As a truly compassionate and caring firearms owner, I am eager to assist the oppressed teachers of California in their quest to purify the CalSTRS of its unwilling investment in the eeeevil firearms industry. I am therefore making a genuine, cash on the table offer to purchase the entire Freedom Group of firearms manufacturing enterprises from the Cerberus Capital Group for the total sum of $100.00.

    I will pay cash, in unmarked, used $20 bills (5 of them!). This offer is valid through January 1, 2015. The Cerberus Group may contact me through this web site. Hey, don’t thank me – it’s for the children of California!

    1. avatar Anon in CT says:

      Sadly, you may not be a qualified investor. What’s your net worth?

    2. avatar Sean says:

      I will offer $150. Of course, I will have to find someone to loan me the $150 in the first place…

  5. avatar Timmy! says:

    I think I have about fifty bucks I could spare. Think they’d sell it to me for that?

  6. avatar Bill in Texas says:

    IdahoPete has a good idea, but I’m willing to step it up to two hundred. Using common core math I will pay in all unused crisp 10 dollar bills. That’s twenty bills, four times what Pete is willing to pay.

    1. avatar IdahoPete says:

      Oh, man! Outbidden already! You wealthy Texas oil hundredaire 1%-ers get all the neat stuff!!! Like, bummer, dude.

  7. avatar Peter says:

    Can’t the pension fund just pull their money out and invest it in something a bit more PC, like solar power?

    1. avatar IdahoPete says:

      Well, sure, but they might lose money that way, plus they couldn’t make a big issue of the eeeevil gun companies.

  8. avatar Mark says:

    Cerberus isn’t an organization that magically makes awful companies profitable. They’re a corporate “chop shop” – the place you send your Impala when the wheels & the radio have greater value than the complete car.

    Look what a great job they did with Chrysler!

    These companies are all dead – Sandy Hook just made them profitable for a couple more years.

    1. avatar Roscoe says:

      Poetic justice for the PC minded at CalSTRS and their horrified anti-gun membership.

      I hope they bought high since they can’t wait to sell. In fact, I hope that investment goes the way of REITS in the 90’s; SOL.

  9. avatar Natty Light says:

    Does anyone know what the discoloration on the barrel is?

    1. avatar John L. says:

      Poor maintenance?

    2. avatar Wiregrass says:

      Probably some kind of digital camo coating finish, would be my guess. Looks out of place with the rest of the rifle.

    3. avatar Tom in Oregon says:

      fingerprint powder? Or superglue fume residue for hardening fingerprints

  10. avatar Pikes Pete says:

    So if I understand this right, CalSTRS is so morally torn apart by this issue that they are going to take the financial lose and divest immediately. Right? …… oh, no they aren’t? These scumbags still want to make a buck off of FG even though they shoot off their mouths about the horror of guns !

    So what makes CalSTRS different than Krupp that sold the NAZIs bombs, or IG Farben that sold them Zyklon B gas for the death camps? How do these repugnant pieces of crap look at themselves in the mirror ?

    1. avatar John L. says:

      Doublethink. Goes with newspeak, dontcha know.

    2. avatar Drewlssix says:

      Not only that but they presumably want to sell these names off to continue making and selling firearms anyway. This shows just how committed they are to their cause, they have the chance to shut the doors on a not insignificant portion of US gun production. All it requires is a bit of sacrifice.

  11. avatar mike says:

    Sig should consider buying AAC and instantly strengthen their suppressor presence. Would be a nice employee reunion. Unfortunately AAC and Remington are ball-and-chained together because of the 300 BLK caliber.

    1. avatar tk says:

      Sadly, Remington itself doesn’t give a rat’s ass about 300 BLK. Barnes just stepped up to produce the new and long-awaited target load for 300 BLK for Remington, because Remington is incompetent.

  12. avatar Tsn4 says:

    Anyone have a logical explanation for why the barrel and front site on the rifle in that picture look the way they do? Everything else on the rifle looks brand new but the barrel and front sight look very, very not brand new. Just curious.

    1. avatar spacecoaster says:

      I have no idea why the front of the rifle looks so corroded. The photo is an evidence photo taken of the rifle where it was found near the Sandy Hook shooter’s (notice how I avoided using the scumbag’s name) body in room 10 of the school. Might just be that his mother did not take very good care of her weapons.

      1. avatar Tsn4 says:

        Think of not using the killers name. I refuse to name those animals. It seems to me that if the rifle was simply neglected it would show all over the rifle. Like I said, the rest of the rifle looks brand new, why would just the barrel look like it did ten tours in Vietnam?

  13. avatar John Lilburne says:

    Is CalSTRS also going to disinvest from hospitals?

    Stunning News On Preventable Deaths In Hospitals
    http://www.forbes.com/sites/leahbinder/2013/09/23/stunning-news-on-preventable-deaths-in-hospitals/

    According to a new study just out from the prestigious Journal of Patient Safety, four times as many people die from preventable medical errors than we thought, as many as 440,000 a year.

    1. avatar Roscoe says:

      Of course not.

      If crotchety old Bloomberg and crew weren’t making it their life mission to impugn and demonize an entire huge mass of the population and the gun industry with their slanderous propaganda and brand ‘guns’ as evil caricatures, the teachers union probably wouldn’t be any more anxious to unload this investment than they would be for any other currently underperforming stock.

  14. avatar Pg2 says:

    “Sandy hook slaughter”…. The reinforcing of official story lines, ie 9/11, Sandy Hook, War on terror, ect never stops for a breather on this site. True agenda revealed?

  15. avatar Seth says:

    How about just giving me The Freedom Group and I will turn them around. It will take a little time, work on one company at a time, but doable.

    1. avatar Anonymous says:

      I agree with Seth. The freedom group is floating and their statist investors, executives, managers, and even factory workers, are pressing down on the flush lever. They should immediately put Seth in charge so he can cut the fat off (lazy, “don’t care” managers) and reorganize the constituent companies into a strong group of people who actually take pride in what they are doing.

    2. avatar John M. says:

      If you’re hiring for that, give me a call.

  16. avatar Tom says:

    CalSTRS has some very serious financial issues as they have a unfunded liability of 71 billion dollars. According to their state auditor the pension fund is “high risk” and will run out of money in 30 years. So teachers, go ahead and demand that the fund divest itself from politically incorrect investments regardless of returns. Then you will wonder why your pension ends up paying less than what you expected or end up with no retirement.

    1. avatar Dyspeptic Gunsmith says:

      That’s what I keep harping on about WRT public employee comp packages.

      They’re leeches on the body politic.

  17. avatar Tim U says:

    Let them all die off. Yes some of those brand names I will miss, and their legacies may be great, but they are a shell surviving solely off any brand name recognition and old glory they can still use. I will not purchase anything out of their failing empire.

  18. avatar Alan Longnecker says:

    Yeah, Freedom Group pulled an AMF (previous owners of Harley Davidson that produced low quality products). They liquidated the name as an asset, now no one wants the used up brand.

  19. avatar Steve Clark says:

    As a car guy and having watched Cerberus pick up Chrysler post-raping from Mercedes, and having watched them fail miserably at running it, I have no faith in Cerberus’ “management.” They buy things to flip and make a fast buck (or a billion); they have no ability to run a company.

    1. avatar Drewlssix says:

      Cerberus era chrysler interiors are down right offensive. First gen Grand Cherokee interiors had quality issues and were even cheap but they were pleasant enough places to be when in good condition but the cerb jeeps hark back to ancient Kias and Hyundais. Same plastic as AMFs bowling ball cases ironically.

  20. avatar GS650G says:

    First there was Cerebus ownership of Chrysler, we know how that turned out. Now the three headed dog owns some of the most storied names in guns. Who will buy them? Fiat?

  21. avatar Kyle says:

    To be fair, Chrysler probably failed under Cerberus because the bottom of the economy fell out.

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