-Caveat Lector- WACO NEWS http://www.accesswaco.com/index.html Calif. Gunmaker Files for Bankruptcy LOS ANGELES (AP)--A California gunmaker targeted in lawsuits by cities seeking to recoup the costs of gun-related violence has filed for bankruptcy protection, raising concerns that other weapons manufacturers named in the lawsuits will follow the same path to escape big payouts. Davis Industries, a Chino, Calif.-based company that produces small, cheap handguns known as Saturday night specials, filed for Chapter 11 protection in May. The move has alarmed attorneys representing cities that have sued Davis and more than a dozen other gunmakers. ``It's a no-win situation for everybody. The industry would basically be run by a bankruptcy judge and our suits would be put on hold until the industry is reorganized by the court,'' said lawyer John Coale, who sued gunmakers on behalf of New Orleans, Cincinnati, Cleveland and Newark, N.J. A call seeking comment from Davis Industries was not returned Thursday. Cities including Los Angeles, Chicago and New Orleans filed the suits, accusing gunmakers of failing to equip weapons with adequate safety devices, and marketing them in ways that allow firearms to fall into the hands of criminals. The cases are patterned after lawsuits that forced cigarette makers to pay some $246 billion over the next 25 years to reimburse states for the costs of treating tobacco-related illnesses. Doug Painter, executive director of the Washington-based National Shooting Sports Foundation, said there has been no indication that gun companies are collectively considering bankruptcy as a legal strategy. ``Never has it been brought up by any of our member companies,'' he said. The owner of a California gunmaker, however, said bankruptcy would provide the firearms industry with some clear advantages. ``I think what Davis is doing is probably a good idea,'' said Jim Waldorf of Lorcin Engineering, a Mira Loma-based company. ``When you have a multitude of things that have no merit on the evidence, it's best for it to be decided in a federal arena rather than in several jurisdictions.'' Once a defendant files for protection, the lawsuits move into federal bankruptcy court where the judge ultimately approves a reorganization plan for the company and decides where to allocate its money. Plaintiffs who win their lawsuits join other creditors in trying to collect. Even if the company wants to offer a settlement, the other creditors and the bankruptcy judge typically have a say in whether it will be approved. Waldorf said Lorcin won't file for bankruptcy. The company emerged from Chapter 11 protection only six months ago after being hit with two dozen product liability suits, he said. Pressure from the lawsuits has prompted the National Shooting Sports Foundation to hold talks with the municipalities and their attorneys about technical issues, such as the viability of safety technologies that the lawsuits advocate. ``It's not settlement talks; it's opening discussions to clarify what we believe is a tremendous amount of misinformation and misunderstanding in the lawsuits themselves,'' Painter said. As an example, Painter referred to ``smart'' gun technologies that the lawsuits accuse gunmakers of refusing to adopt. Such guns would fire only after recognizing the owner's voice or palm prints. So far, no one has been able to make such a device small or rugged enough to fit inside a handgun, Painter said. Coale did not believe the talks would lead to a settlement. ``I'm pessimistic now that the moderates in either camp are going to prevail,'' he said. ``We're probably going to go to war.'' Tobacco companies entered their legal battle with the states as a unified, prosperous industry. Gun companies, by contrast, don't have as much money and have failed to reach a united legal strategy. Aside from the foundation-sponsored discussions, they have chosen to deal with the cities' lawsuits individually. The gun industry comprises mostly small companies with annual revenues in the $2 billion to $3 billion range. The only publicly traded company, Sturm Ruger & Co. Inc., reported earnings of $8.4 million on revenues of $62.9 million for the first quarter of 1999. Gun sales fell sharply after peaking in 1993, when Americans responded to the 1992 Los Angeles riots and proposed gun-control laws by buying thousands of new weapons. But industrywide sales in 1999 are on the rise, Waldorf said, because of new restrictions being considered in the wake of the Columbine High School massacre. ``Gun control always spurs sales,'' he said. AP-NY-06-25-99 0309EDT Copyright 1999, The Associated Press. The information contained in the AP Online news report may not be published, broadcast or redistributed without the prior written authority of The Associated Press. | home | news | sports | money | living | community | marketplace | Yellow Pages | By using this service you accept the terms of our visitor agreement. Please read it. Registered site users, to edit your personal profile, click here. 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