Will They Survive? Gunwerks Faces $2.78 Million Lawsuit for Unpaid DebtsMay 22, 2020
Update: We reached out to Gunwerks for clarification on the lawsuit filed against them by Wells Fargo. Here is what we uncovered.
Banking giant Wells Fargo has set its sights on Gunwerks, filing a lawsuit against the high-end custom rifle manufacturer for $2.78 million in unpaid loans. Wells Fargo filed the lawsuit in federal court in Wyoming, where Gunwerks is headquartered. The lawsuit alleges that, in addition to outstanding loans, Gunwerks also owes $1 million in unpaid sales taxes and loans from other creditors. Gunwerk’s owner, Aaron Davidson, is named as a co-defendant in the lawsuit.
A complete copy of the lawsuit, which was filed on May 21, can be viewed here.
In addition to the $2.78 million, Wells Fargo is seeking Gunwerks’ equipment, inventory, and intellectual property, which were used as collateral for the loans.
A report by the Cody Enterprise, the newspaper for Cody, Wyoming, where Gunwerks is located, states that Gunwerks’ most-recent financial statement shows the company owes third parties more than $622,000, which is more than 60 days past due. The report also states that Gunwerks stopped paying sales tax in the third quarter of 2018 and that the amount due is approximately $365,000.
In March 2019, Gunwerks broke ground on a new five-acre manufacturing facility paid for through a $6 million economic development grant from the Wyoming Business Council. The building was deeded to Forward Cody, a local economic development organization, and leased to Gunwerks with lease payments going toward future economic development projects for the town of 9,800.
According to a press release about the groundbreaking, Gunwerks had committed to create more than 50 high-paying jobs and to purchasing more than $5 million in equipment for the facility by 2025. Now, the future of the company is in question. Local Casper, Wyoming news radio station KTWO reached out to Gunwerks for a statement on the future of the company and its employees. So far, Gunwerks has not responded to the request for a comment.
The financial turmoil comes as a shock to the gun industry, where Gunwerks has had a high-profile presence for many years. Along with the high end, high-performance rifles, optics, and gear, Gunwerks runs elite shooting clinics and posh guided hunts. Its annual participation at Shot Show is marked by a premiere booth with a large footprint that includes a lounge area. The company also produces the Long Range Pursuit television show and Long Range Pursuit podcast, both of which posted new episodes as late as April 2020.
This is a tale as old as time, unfortunately. Creating a great gun and running a great business doesn’t automatically go hand-in-hand. We’re still waiting to hear Gunwerks’ side of the story, but the evidence included in Wells Fargo’s lawsuit doesn’t bid well for the rifle company. It is true that it takes money to make money, but not when it comes a the expense of the very company itself. We will be following the developments in this situation closely.
Jeremy Mallette is co-founder of International Sportsman, and an avid hunter and outdoorsman. His father taught him to shoot at age six, and he received his first firearm at age eight — a 1942 Colt Commando .38 special revolver. Jeremy enjoys collecting unique firearms, and shooting them.