Wyoming-based premium rifle maker Gunwerks had been doing business with Wells Fargo for years. When the bank recently tried to change the collateral valuation basis underlying the company’s working capital loan, lender and borrower got into a dispute. That dispute escalated over time and resulted in Wells Fargo filing suit against Gunwerks earlier this week.
The filing of the suit was picked up by a Casper radio station which ran a story parroting a number of claims asserted by Wells in the lawsuit, namely that Gunwerks wasn’t paying vendors and was delinquent in their sales tax payments. That story created doubt about Gunwerks financial viability and concern among the company’s vendors and customers.
TTAG talked to Gunwerks yesterday. They told us that not only were the claims about delinquent taxes and vendor payments in the Wells Fargo suit false, but the company is having a record sales year and has the cash on hand to pay the loan off. The suit, Gunwerks tells us, was a hardball move intended to strongarm the company during some heated negotiations.
The reports of Gunwerks’ demise are completely false. In fact, we’re crushing it! So far, 2020 has set records for sales performance and profitability, and it only gets better from here!
This week’s report of Wells Fargo filing a lawsuit has gotten a lot of attention. The bottom line is, the litigation has been settled, the entirety of our Wells Fargo operating loan has been paid off, and it is business as usual for Gunwerks.
The Wells Fargo narrative of Gunwerks’ financial distress was untrue. The dispute was never about Gunwerks’ financial condition or late payments, but about a difference of opinion on asset valuation. Within days of filing the suit, it has been settled and the case will be dismissed immediately.
Most of the stories circulating around the social media landscape are just wrong! Here are two good examples: In Wells Fargo’s narrative complaint filed in federal district court, they assert that Gunwerks was delinquent on sales tax payments. This is not true now and has never been true (Check here for a list of current delinquents in WY). They also allege that Gunwerks is late paying vendors. Again, this is untrue. We pride ourselves in dealing fairly with our vendors.
Unfortunately, despite our numerous good faith attempts to resolve the issues with Wells Fargo, the bank chose to file a lawsuit, which has now been settled. Fortunately, we had the resources to pay off the credit line within two business days of Wells Fargo filing suit. Our customers have really supported us this year with record sales. We’re on track to have our best performing year on record.
In 2020 Gunwerks will be announcing several new and innovative products that have been in development the past several years. Keep an eye out for an entirely new, next-gen rifle system engineered from the ground up, at least three more Skunkwerks projects, and new optics products and ballistic solutions in the Revic lineup.
The damage to Gunwerks’ reputation from Wells Fargo’s lawsuit will take quite a while to overcome, but with our team and a foundation of innovation and product quality, we see this as a minor incident. We’ve never been more excited about our business!
Aaron Davidson, CEO Gunwerks