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Ellett Brothers, a bankrupt firearms distributor founded in South Carolina, will lay off more than 170 workers at its Chapin facility and close the plant by August.
The announcement surfaced Tuesday, the day after the company filed for Chapter 11 bankruptcy in Delaware, where its parent company, United Sporting, is based.
United Sporting’s chief restructuring officer, Dalton Edgecomb, sent a notice about the layoffs to employees on June 7, according to a filing with the South Carolina Department of Employment and Workforce.
“This closure will be permanent and will constitute a plant closing,” Edgecomb wrote about the facility at 267 Columbia Ave. in a memo to the department. “Although Ellett Brothers, LLC will continue to exist, it will be a significantly smaller organization.”
The 86-year-old company’s financial collapse was exacerbated, according to the bankruptcy filing, by declining sales in recent years. However, a lawsuit filed by lender Prospect Capital Corp. against Ellett’s owner, Wellspring Capital Management, alleges shadier dealings.
According to the lawsuit, Wellspring and its partnerships guided Ellett Brothers into financial ruin by taking hundreds of millions in loan money away from the business and instead paying cash to executives, investors, shareholders and others.
The notice said the first round of layoffs was expected to occur on June 10, the day Ellett Brothers filed for bankruptcy. It is unclear if those layoffs occurred. Human Resources director Grace Brickle declined to comment Tuesday afternoon.
Additional layoffs “may come in stages,” Edgecomb’s letter said, “depending on the need for workers during the transition period.”
More than 170 jobs — from senior vice president of operations to the human resources director herself and an entire firearms sales department of 37 employees — will be eliminated in the coming weeks, as the plant dwindles to a complete closure by Aug. 5, according to the notice.