[NEW YORK, NY] A late-Sunday news report has indicated the Cerberus Capital Management LP will allow individual investors the option of divesting from Cerberus’ stake in Freedom Group, the manufacturer of the military-style assault rifle used in the Sandy Hook shooting. Cerberus Capital Management owns a 94% stake in Freedom Group and has had difficulty structuring a deal to sell the tainted arms manufacturer.
Cerberus Capital Management has faced increasing pressure from Sandy Hook victims’ family members and institutional investors who believe Cerberus’ ownership of Freedom Group is irresponsible. Immediately after the Newtown massacre, Cerberus’ CEO, Stephen Feinberg, pledged to divest from the gun manufacturer. Since making that promise, Freedom Group has made large financial contributions to the NRA’s lobbying efforts that have stymied common sense gun-safety laws, such as requiring universal background checks.
In the proposal reported on Sunday, Cerberus would allow fund investors to individually divest from Freedom Group. This move would diminish internal pressure on Cerberus to sell its ownership stake in Freedom Group all the while protecting Cerberus’ financial position in an otherwise toxic company.
“Half measures from Cerberus Capital Management are not enough,” said Jennifer Fiore, executive director of the Campaign to Unload, a national coalition to promote divestment from assault weapons manufacturing. “As the principal owner of one of the most toxic products in America, Cerberus and its CEO, Steven Feinberg, have an ethical responsibility to unequivocally divest from Freedom Group.”
In response to Sunday’s news reports, Campaign to Unload coalition partners openly questioned Cerberus’ intentions by examining their past behavior.
“Cerberus could have been a role model for what it means to be a responsible investor,” said Aaron Black, a founder of the campaign. “They could have led the gun industry in implementing safer gun technologies like bio-recognition trigger locks. They could have promoted responsible gun ownership by mandating universal background checks. But they didn’t. Instead, after their product killed 20 school kids and six educators, they helped finance the NRA’s campaign against common sense gun laws and did everything they could to protect their own financial position.”
The Campaign to Unload has recently intensified its organizing drive as the Newtown anniversary approaches and mailed Cerberus an open letter signed by 50 prominent community leaders calling on the private equity firm to follow through on its promise to divest and is held a vigil with NYC faith leaders and victims of gun violence outside of Cerberus headquarters at 10 a.m. this morning.
The Campaign to Unload is comprised of more than 30 advocacy organizations, which represent more than 20 million Americans from all walks of life. Their shared goal is to promote the divestment of military-style assault weapons from institutional investors.