TUESDAY, JUNE 11, 2019

SEVR Broadheads announces the availability of three new models for 2019: the Ti 1.5, AP 1.7, and Ti 2.1 in 125g.
Murray State University anglers Adam Puckett and Blake Albertson qualified for the 2019 Ranger Cup University Team of the Year Challenge with a win at the recent YETI FLW College Fishing National Championship on the Potomac River.
Junior Trap action was intense during last week’s USA Shooting National Championships and competitors get to do it all over again this week as the 2019 National Junior Olympic Shooting Championships (NJOSC) for Shotgun takes place today and Wednesday.

The Rocky Mountain Elk Foundation and the Lolo National Forest worked with a landowner to purchase and convey 638 acres, an important migration corridor for elk, grizzly bears, Canada lynx and other wildlife, to the U.S. National Forest (USFS). It is now under the management of the Lolo National Forest.
Scattered across the state, Michigan’s Wetland Wonders provide great year-round recreation opportunities like birding, boating, fishing, hiking, photography and hunting.
The Utah Division of Wildlife Resources K9 program has been revitalized with the introduction of two newly trained dogs — and they are ready for action.
Viridian Weapon Technologies is showcasing the FACT Duty Weapon-Mounted Camera at the annual National Sheriffs’ Association Conference and Exposition in Louisville, Ky. The conference will give law enforcement personnel an opportunity to experience the evidence-gathering camera and sign up for a no-cost testing & evaluation program.

Monroe Lake invites imaginative crafters of all ages to its Faerie Gathering at Paynetown State Recreation Area, 4850 S. State Road 446 in Bloomington, on Saturday, June 22.
Teaching children a lifelong hobby, instilling appreciation for our marine environment and providing fun, family outings are the objectives for the Kids’ Fishing Clinic in Cape Canaveral on June 22.
Savage’s new MSR 10 Precision rifle is loaded with features and ready to compete. This extension of Savage’s MSR 10 lineup delivers match-winning accuracy with a stainless steel heavy barrel and 5R button rifling.
Charter fishing is an ideal way to experience Michigan’s world-class fishing. Licensed charter captains, who provide the boat, the equipment and the knowledge needed to pursue fish, can make a full or half day of fishing easy and enjoyable.

- GEAR -
Velvet is 100% synthetic and designed to attract whitetail deer during the spring and summer months. As the summer begins to unfold, the whitetail deer begins growing their new set of antlers. This is an exciting time of the year, yet most people are missing this opportunity to capture some amazing images of deer as they come into their new set of antlers.
For Father's Day this year, show Dad that he doesn't need a pricey scope to be a much better long-range shooter. Take him to the range and show him what Ballistic can do.
For 2019, Lakewood Products is proud to announce their continued support from the following television shows, Roger Raglin Outdoors, Live the Wild Life and Hardcore Pursuit in addition to content creators Nikki Boxler, Pete Maina, Max Wilson and Today’s Angler as well as dozens of hunting and fishing guides across the nation.
Mossy Oak is proud to announce a strategic partnership with Outtech Inc., an alliance that will expand into hunting, fishing, shooting sports, outdoor lifestyle, and many other outdoor-related pursuits.

IGC has established an online store, which makes decorating anything from guns to surfboards in Realtree camo using hydrographic technology that much easier. Simply select your pattern in the online store and IGC will ship the film to you.
Nosler, Inc., a world leader in the production of bullets, cartridge cases, ammunition and firearms, announces the promotion of Tim Paczkowski to the role of North American Sales Manager.
Maintaining traditional public access opportunities in the Crazy Mountains of Montana is the goal of a lawsuit filed yesterday against the U.S. Forest Service by a coalition of conservation-based groups, including Backcountry Hunters & Anglers
Pursuit Media, owner of the Pursuit Channel, has announced a strategic marketing and advertising sales alliance with the Outdoor Specialty Publications Group (OSPG), according to Rusty Faulk, Founder and CEO of Pursuit Media.

Mossy Oak Fishing teams up with XTRATUF to offer the all-new XTRATUF Mossy Oak Fishing Collection, featuring Mossy Oak Elements Agua.
Express your localness and your love for the outdoors by wearing one of several Local Boy Realtree Shirts, available in a variety of colors and Realtree Fishing pattern and camo designs that cater to both hunters and anglers.
Holosun is pleased to announce the release of their 3 power Flip-to-the-Side Magnifier, the Holosun HM3X. This new product debuted to the public at the NSSF SHOT Show 2019 to much industry acclaim.
Galco is excited to announce additional fits for the Speed Master 2.0 Paddle/Belt Holster. New fits include the Kahr PM and MK series in 9mm and .40 S&W, and a variant for the Kahr P and CW series in 9mm and .40 S&W with Crimson Trace Laserguard.

MTM introduces the Shotshell Box Caddy, a 100 round shotshell carrier for trap, skeet and sporting clay enthusiasts. It grips four MTM shell stackers (included with purchase) or four 12 Ga. 2 ¾” cardboard shell boxes.
Boyds has recently released a bottom metal that allows the Boyds stocks to accept the Ruger American rifles with the AI-Style magazines. The bottom metal kit also allows other Ruger American rifles to be converted to allow the use of the Ruger AI-Style magazines when they are assembled to a Boyds stock.
DeSantis Gunhide introduces the #137 Slim-Tuk holster for the SIG P365 with Lima365 or Foxtrot365 attached. The Slim-Tuk is a bilateral IWB with a tuckable clip for varied mounting options.
Guntec USA introduces their AR 9MM Micro Breach Pistol Brace Kit. This brace kit is made of Zytel Polymer Composite. It compresses against buffer tube at two locking points and a complete pistol buffer tube kit is included.

Parts of Indiana's Fairfax State Recreation Area will be closed to the public from June 13-17, for preparation, hosting and cleanup of the second leg of the International Bowhunting Organization’s (IBO) Triple Crown archery competition.
More full episodes of "The High Road with Keith Warren” were promised to their YouTube Channel and here they come. Watch as Keith and Matti Warren head back up to Legends Ranch for the "Legacy Hunt” to hunt in the snow. It’s late season and Matti is after a big framed typical buck. She has a big surprise for her dad.
USA Shooting has announced the promotions of staff members Brent McPherson and Stacy Weiland as the organization continues to strive for its 2020 vision and align for continued progression in athlete, coach and resource development.
The Gulf of Mexico Fishery Management Council took final action on a Framework amendment that considers reducing the commercial trip limit for greater amberjack.

The National Shooting Sports Foundation and the Bureau of Justice Assistance unveiled a new public service announcement, “Protect the People You Love,” to encourage families to talk about gun safety — regardless of whether they have a gun in the home.
More than 70 youngsters and their families joined union volunteers for a weekend packed with conservation-related activities during the Union Sportsmen’s Alliance’s (USA) third annual Family Campout at Montgomery Bell State Park in Burns, Tennessee, June 8 and 9.
In the June/July issue of Ballistic, the first “Warrior of the Year” is named and it’s only fitting that Omar “Crispy” Avila take the honors. His story is both legendary and inspiring.
Investigators with the Indiana DNR Division of Law Enforcement were recently recognized as sharing a Team Excellence Award by the U.S. Fish and Wildlife Service (USFWS) for their work during a lengthy multi-agency investigation focusing on illegal commercial fishing.

For the seventh time in 11 years, a DNR project has taken home an Excellence in GIS Award from the annual Indiana GIS Conference.
The Indiana DNR Division of Law Enforcement recently recognized officers at an awards ceremony held in Indianapolis.
In honor of National Jerky Day tomorrow, Hi Mountain Seasonings will be offering 40-percent off its full line of Jerky Cure & Seasoning Kits (JCS) and Variety Packs. This sale runs from 12:00 a.m. until 11:59 p.m. on June 12th.
The National Archery in the Schools Program (NASP®) is extremely pleased to announce that Bass Pro Shops and Cabela’s Outdoor Fund has again invested in the kids of NASP®. When millions of happy customers make a purchase at their local Bass Pro Shops or Cabela’s store, they’re asked if they’d like to “round up” the total to the nearest whole dollar to help a worthy outdoor cause.
Madison Game Calls has renewed as a Whitetails Unlimited national sponsor, WTU President Jeff Schinkten has announced.
Lone Wolf Distributors welcomes back Jason Matzinger – Into High Country TV.
The next regular meeting of the Michigan Natural Resources Commission is set for Thursday, June 13, at the Detroit Zoological Society in Royal Oak.
The Maine Department of Inland Fisheries and Wildlife is now accepting nominations for the 2019 Annual Lifetime Outdoor Achievement Award, which honors individuals who are dedicated to the stewardship and wise use of the state's natural resources, and who have been or are active in Maine’s rich outdoor traditions.
After getting back on four wheels and rolling again, John Reed and Kirk McKendree decide to change things up and head east to the Hill Country. Meeting up with Chad and his youngest son Braeden, things heat up fast as the boys embark on one of their best predator hunting nights ever.
If you're seeking to expand your wild game cooking knowledge, look no further than on MyOutdoorTV (MOTV) with hours of cooking tips, recipes and more from today’s most well-known chefs. Watch The Sporting Chef Scott Leysath give tips on knife skills, how to flash fry food and how to pair wine with wild game.
Everything Eichler is a closer look at the Eicher family’s field-to-table lifestyle now airing on Sportsman Channel on Sundays at 12:30 p.m. ET.
Outdoor Channel hosts and adventurers Chris and Casey Keefer continue battling the elements in Saskatchewan in the latest season of Dropped on Mondays at 7:30 p.m.

Yesterday, the “other shoe dropped” in the matter of SportCo Holdings, the company that owns, among others, Ellett Brothers and United Sporting Co. After months of rumors concerning their overall fiscal health, the company filed for Chapter 11 bankruptcy, saying it planned to liquidate it’s holdings.

The company cited management’s impression that Hillary Clinton would win the White House in 2016 and it’s subsequent speculation into guns and ammunition based on that mistaken presumption as one major factor in their failure. Rather than booming sales and healthy margins, they were caught with inventory no one wanted.

Company CEO Bradley Johnson also cited other factors, including industry “disruption” caused by the Bass Pro Shop acquisition of Cabela’s, Gander Mountain’s bankruptcy and hurricanes that devastated much of the Southeast, including South Carolina.

But there’s more to this story than the long-term impact the failure will have on an already turgid business environment.

The top ten major unsecured creditors in the SportCo filing are (from #1 to #10) : Vista Outdoors ($3,299,326.61), Sturm Ruger ($3,196.842.10), Magpul Industries ($2,078,353.17), Savage Arms Rifles ($1,927,392.50), Bushnell Corp. ($1,879,795.66), Navico Company ($1,743,684.04), Henry RAC Holding Corp. ($1,467,618.00), Smith & Wesson Corp. ($1,386, 714.26), Garmin USA, Inc. ($1,150,579.41), and Fiocchi of America ($1,096, 632.70).

The filing’s listing of other unsecured creditors reads like a who’s who of the rest of the industry: FN America, Magtech, Remington Arms, Kel-Tec, Hornady, Leupold & Stevens, Heckler & Koch, Barrett Firearms, Browning Arms Company, Blaser USA, Armscor, Chiappa, Bond Arms, Truglo, and SCCY.

Keep in mind those are only the top 30 creditors. SportCo’s filing says there are anywhere from 200 to 999 companies and individuals.

With SportCo Holdings filing, the industry will be roiled for some time to come.

But another legal action, this time a civil suit filed in South Carolina nearly three weeks ago, by a New York financial group lays the groundwork for a story that will have even longer-lasting implications.

The first question will undoubtedly be whether the South Carolina suit puts the legality of the Delaware filing into question.

That’s because the two corporations listed as holding 10% or more of SportCo’s equity interest are Prospect Capital Corporation and Wellspring Capital Partners I.V. LP.

The opposing parties in the South Carolina suit.

Prospect Capital Corp., has filled their civil suit against “Wellspring Capital Management LLC; Wellspring Capital Partners IV, L.P.; WCM GenPar IV, L.P.; WCM GenPar IV GP, LLC; Alexander E. Carles; William F. Dawson, Jr.; John E. Morningstar; Bradley Johnson; F. Hewitt Grant; Charles E. Walker,Jr.; Todd Boehly; Bernard Ziomek; Andrew Kupchik; and John Does One through One Hundred.”

According to the filing, that listing of individuals, managers and entities were collectively loaned a total of $188,864,420.94, ostensible to build Ellett Brothers LLC and the various affiliated subsidiaries.

Instead, the suit alleges is the funds never used for their intended purpose. Instead the borrowers used them - along with proceeds of additional loans from other lenders- to enrich..themselves.

In fact, the lawsuit claims that $183,169,466.94 of more than $188-million went to Wellspring IV- the controlling and largest shareholder of the borrowers.

If that’s the case, this would unquestionably be the largest fraud case -ever- in the firearms industry.

The 32-page lawsuit paints a plain-language, less-than-flattering image of the group of investors Prospect Capital alleges took a company that as recently as 2015 was the fifth-largest privately held corporation in South Carolina and ran it into the ground. Along the way, they lined their own pockets with the loans and sales generated by the company.

Having read many lawsuits over the years, this plainly-worded filing pulls no punches, characterizing the intent of both the owners and managers of Ellett Brothers and its subsidiaries as less than honorable.

Citing record industry sales in 2016, the lawsuit notes that as Ellett’s sales increased, its profits decreased “lagging significantly behind its competitors.”

“Despite those recent periods of elevated sales, it continues, “the D&O defendants completely ruined Ellett, which is now on the brink of extinction. Ellett survived the Great Depression, serious recessions in the 1970s, 1990s, and 2000s, and legislation banning certain of its products. But Ellett could not survive the disastrous tenure of the D&O defendants, which caused Ellett to make the Fraudulent Conveyances and whose reckless and grossly negligent mismanagement of Ellett and bad faith dereliction of their duties led to the dissipation of substantially all of Ellett’s assets during some of the most historically profitable times for companies in the firearms industry.”

That is not typical legalese. One criminal attorney I asked to review the suit characterized it as “anything but a typical civil filing.” In fact, he said it reads like a “pre-charging document prepared by any decent prosecutor looking to go to a grand jury for an indictment.”

The suit is filed in South Carolina- Ellett’s HQ, and specifically references South Carolina’s “Statute of Elizabeth” - the litmus test for fraudulent conveyances.

Under that law, “every gift, grant alienation, bargain, transfer, and conveyance of lands… for any intent or purpose to delay, hinder, or defraud creditors and others of their just and lawful actions, suits, debts, accounts, damages, penalties, and forfeitures must be deemed and taken… to be clearly and utterly void…”

There are also these “badges of fraud”:

- insolvency or indebtedness of of transferor

- a lack of consideration for the conveyance

- a relationship between the transferor and transferee

- pending or threatened litigation

- secrecy of concealment

- departure from usual methods of business

- transfer or debtor’s entire estate

- reservation of benefit to the transferor

- retention by the debtor of possession of the property

In making the case for the actions of Ellett management meeting one-or several- of those “badges of fraud” the suit references transfers of millions of dollars received via loans to the trustees and the transfers of most -if not all- of those funds (and others) on the same day (my emphasis) to one or more of the parties listed as defendants in the suit.

This isn’t a simple case, and the filing by Prospect Capital certainly only represents one side in the story. But it clearly defines the battlefield across which a major industry story will be fought.

With nearly 190-million dollars in play, there will be some big guns involved in the civil suit. The implications for criminal actions also can’t be discounted.

Unfortunately, it seems things are tough worldwide for the firearms companies.

Late last week, I was forwarded a German business media report regarding Heckler & Koch.

It began with this (translated) headline: “The Gun Manufacturer Hecker & Koch Is Facing the End”.

It wasn’t a question; it was a straightforward, declarative sentence.

The story went on to report that H&K was losing a financial battle due to lagging sales, In fact, the report said, 2018’s losses were so significant that financial issues were only cushioned by “two bridging loans from an unnamed major shareholder.”

So severe was the situation that KPMG inserted a warning in their 2018 audit. The passage reads: “the lack of liquidity endangers the continued existence of Heckler & Koch. To ensure continued existence, significantly more revenue would have to be generated in the current year than the previous year.”

Indications are that the necessary revenue generation hasn’t happened yet. Last month, H & K’s German workers approved a wage waiver, agreed to increase weekly working hours from 37 to 37.5 hours with no overtime, and cancelled a planned one-time payment of 400 Euros per worker.

Earlier this year, H&K was forced to pay a multi-million fine over illegal arms exports to Mexico.

H&K, meanwhile, remains in the competition for the new assault rifle for the Bundeswehr - which currently carries the company’s G36.

But an issue outside rifle performance stipulated in the Ministry of Defense specs - is causing concern that H&K may be disqualified.

The issue? The overall fiscal health of companies being considered. H&K has asked for a change in the fiscal requirements, but the German report quotes politicians as saying any lessening of the fiscal requirements would be a very “political decision” -and not likely.

Currently H&K supplies the armies of France, Norway and Lithuania with combat rifles in addition to the German Bundeswehr.

Is H&K is “facing the end” or simply suffering the same lagging sales pressuring other manufacturers?

No one knows at this point, but I do know that U.S. manufactures are considering almost any option- from “rightsizing” production staff to outsourcing virtually everything except the actual manufacturing of product - to survive what has turned out to be a very long dry spell.

As always, we’ll keep you posted.

—Jim Shepherd

Event Calendar

Import/Export Conference

Washington, DC (Website)

Boone and Crockett Club's 30th Big Game Awards

Wonders of Wildlife National Museum & Aquarium, Springfield, Missouri,

Outfitter Wire - 2271 N Upton St., Arlington, VA 22207
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