(CA) Bank robbery gun shop files bankruptcy papers

[Drizzt]

Friday, February 15, 2002
Bank robbery gun shop files bankruptcy papers

By Brent Hopkins

Staff Writer

NORTH HOLLYWOOD -- B&B Sales, the well-known San Fernando Valley gun store that helped arm police during the 1997 North Hollywood bank robbery shootout, filed for Chapter 7 bankruptcy Thursday.

Previously, the chain hoped to emerge from reorganization under Chapter 11 protection from its creditors, but was unable to turn a profit and instead elected to liquidate.

"I'm shocked," said Rick Kaumeyer, a West Hills fraud investigator who has been buying firearms there for more than a decade. "They were always there for the community, and I'm sad to see them go."

At its peak, B&B was one of Southern California's premier gun sellers, from its flagship North Hollywood location and a second in Westminster. Both locations closed Thursday.

According to Bankruptcy Court filings, revenues topped out at $23 million during its heyday, when 50 employees staffed its two stores. At its North Hollywood location on Oxnard Street, target shooters and law enforcement personnel alike stocked up from a wide selection of handguns, rifles and shotguns.

The Los Angeles Police Department became B&B's most visible consumer during the notorious North Hollywood shootout, when cops borrowed high-powered semiautomatic rifles and shotguns from the dealer to do battle with body-armored bank robbers who had superior firepower.

B&B later auctioned off the guns and donated proceeds to the LAPD Memorial Fund.

But while the company remained a high-profile dealer, its finances were in turmoil.

In 1993, relations between its founders, brothers Bob and Barry Kahn, soured. This led to litigation between the two over control of the company in 1994, eventually leading to a settlement in 1997 that left the business in the hands of Bob Kahn and his wife, Kathleen. It also racked up $1.75 million in legal and accounting fees, the first cited cause of the bankruptcy.

According to the filing, at this time, Barry Kahn engaged in illegal activities that would have endangered B&B's licenses and which later got him locked up in federal prison. The filing further alleges that he bought substantial inventory against Bob Kahn's wishes, which then had to be liquidated at a loss for $425,000. Bad investments followed, and all the while the company found itself with increasing legal headaches.

Beyond that, anti-gun legislation by the city has hurt.

"Gun businesses are dropping like flies in the city of Los Angeles," said Chuck Michel, a spokesman for the California Rifle and Pistol Association and a lawyer who represented B&B in past lawsuits. "They have ridiculous taxes, ridiculous expenses and it's impossible to find employees to get their permits approved. The simple truth is that they've litigated this store to death, which is what they always wanted to do."

Two of B&B's past legal difficulties are cited in the filing. A lawsuit filed by various municipalities in 1999, prosecuting various dealers and manufacturers as contributing to a public nuisance, tied up more funds in legal fees. Last March, agents from the California Department of Justice raided both of B&B's facilities, alleging that the dealer had defrauded gun buyers.

"B&B believes that these acts were a blatant, premeditated and orchestrated attempt to destroy B&B," the filing reads.

Hallye Jordan, a spokeswoman for the Justice Department, disputed this, saying the department had turned up numerous complaints that the firm had charged buyers for personal transfers of firearms, a transaction that should be free.

"We got some complaints from consumers that they were being charged these fees, then we did some sting operations where our agents were overcharged, as well," Jordan said. "We talked to the owners and advised them that was illegal. They were warned, which is what led to the search warrants being served."

All these factors led the company to file for Chapter 11 protection last August, attorney Jeffrey Shinbrot said, when B&B sought to reorganize its finances. Things even looked up for a bit, when interest in guns rallied after Sept. 11.

"After the Sept. 11 attacks, the revenues increased dramatically, which made them apparently profitable through the end of October," Shinbrot said. "However, the increase in sales diminished and the business was not profitable."

That's when lawyers changed their petition to Chapter 7, permitting a liquidation of the company's assets.

Kahn told the Daily News last month that Assembly Bill 106, which went into effect Jan. 1 and which requires trigger locks for all guns sold in California, hurt business further. Since the devices were in short supply, his sales were severely curtailed, which Shinbrot said was a factor in the decision to liquidate.

Kahn declined comment Thursday.

Other local gun dealers agreed that tougher gun laws made business difficult.

"I'd have to agree that they're trying to make it difficult on us, but our business has been relatively pretty good," said Gene Lumsden, vice president of operations for Turner's Outdoorsman. "I think they're running out of things to do. The only thing they can do is finally say we just don't want you to own guns anymore, and then people will know what their true agenda is."

Sam Rosenfeld, store manager of Collateral Loans Inc., a pawn shop in Reseda, agreed.

"You would not believe the various and sundry taxes and fees, surcharges and licenses -- they call them all kinds of different names," he said. "What they're trying to do is tax us out of the business."

But according to Stuart Adler, assistant manager of The Firing Line, a gun shop and firing range in Northridge, the laws don't restrict business to impossible levels.

"It's a lot of pain, but we're seeing a good rate of gun sales," he said. "People resent the fact they need to buy a lock, but a good salesman's a good salesman. I'm a conservative, but I don't think anything will happen. It's difficult, but I think that the laws are OK. Some of them just aren't implemented well."

[deej]

But according to Stuart Adler, assistant manager of The Firing Line, a gun shop and firing range in Northridge, the laws don't restrict business to impossible levels.

"It's a lot of pain, but we're seeing a good rate of gun sales," he said. "People resent the fact they need to buy a lock, but a good salesman's a good salesman. I'm a conservative, but I don't think anything will happen. It's difficult, but I think that the laws are OK. Some of them just aren't implemented well."

I sincerely hope that none of our SoCal friends are patronizing this idiot.

DJ

[KSFreeman]

Hear, hear.

I wonder if Adler wants to do my taxes since he is so adept at handling regulations?

[C.R.Sam]

A shame. Very convoluted things goin on there in the last few years.

Used to be a neat place to go and get rid of excess funds....or just browse.....or meet other like minded folk.

Agree....Stuart Adler is coming off like he is already whipped, or stooped.

If we can't overtly shut you down, we will tax and regulate you untill you find it is no longer profitable to remain in business.....and then you will shut yourself down.

:barf: :barf:

Sam

[Russ]

Too bad. I'm dismayed. I bought 6 handguns from them over the years I lived in the PRK. Large selection and good prices. I'm sorry to hear this. Since they are now a Ch 7, it's over. What a drag. This was a great place to shop, browse and drool over their large selection. No body else in So. CA comes close.

DemocRATS gain control, this is what happens. Vote that party in and you eat crap. Chock up another one for Gay Davis. What a POS. The legistature and Courts are also POS's.

[Jay Baker]

I've know Bob and Barry for many years, since they had the small shop on Cumpston St., in North Hollywood. When they bought the building on Oxnard St., Bob took me over one day, while they were remodling it, and showed me what they were going to do.

I have no idea how many times I've been in there, nor do I know exactly how many guns I bought from B&B. (I'd have to dig out the Bills of Sale to find out.)

What a shame!! But it is no surprise. The communistnazis who now run Kalif., and Los Angeles City/County, will eventually outlaw all gun stores, and all gun ownership in Kalifornina, except for their own heavily armed bodyguards and Gestapoesque Police.

That's exactly what the communistnazis have been intending for many, many years. Now, finally in control of EVERYTHING in Kalif., they are accomplishing their goal, step by step by step by step.

(And, yeah, that dooofus Adler, is either a typical bliss ninny, or in the pockets of the communistnazis. "We'll let you operate, Mr. Adler, so long as you endorse our communistnzi policies." Hmmm.)

J.B.

The Locomotives Continue Racing Toward Each Other.

[Quartus]

deej, you beat me to it. He's a conservative? That's why we're in trouble.


Bought from B&Bs once. Wasn't impressed. But too bad to see another shop close down.

Sounds like they imploded, though. Lots of dumb moves. When The Man warns you that what you are doing is illegal, and you don't either stop or get a lawyer, uh, what are you thinking?

[tyme]

The next time there's a shootout with perps in body armor in a major city in CA, and the cops can't do anything because there are no nearby gun shops with real weapons or ammo, maybe someone will get a clue...

then again maybe not.

[Vladimir_Berkov]

Now that the LAPD has armored personel carriers with mounts for M60 machineguns, I think all the little kiddies will be safe.

[Derek Zeanah]

I got my first shotgun there -- a 12 ga Browning BPS "Boy's Gun". It's got an 18" barrel, and according to OSHA in 1994 the barrel was too short for me to be shooting skeet with it. I still remember buying picking that gun out when I was 12 though.

<sigh>

Looks like I got out just in time.

[HKguy9]

I bought my first gun, my USP40 from them. THe service sucked, but some of the folks there are pretty helpful, just not my salesman. They make the best price, write you up THEN they order your gun. Big mistake for me, I waited two months for it.

I drove up to North Hollywood, the guy who helped me was really friendly.

I go to Firing Line on Orange County. I never been to the Northridge one, but the Orange County store is where I shot a gun for the first time. I never met Adler, but the people at the Huntington Beach store are good people.

[Archer1440]

I've shot at the Firing Line in Northridge, nothing special there.

B&B had a good inventory and some knowledgable people- however, the 'take a number" approach and indifference on the part of sales guys were turn-offs.

I mostly bought from Pony Express even though it was a few bucks more.

[HKguy9]

I try to do business at Arm USA and Turners. The Turners folks are pretty friendly and knowledgable. The Arm USA folks helped me out on the phone with a rifle (calling me back and everything) that wouldn't have been in the US for another few months. My chance on buying it almost zilch, but they returned my calls and everything. They called me back when they got their new Wilsons in so I could come in and look at it, even though they knew I just bought two new guns ($2000) in the last month and like hell I'd buy a $2000 handgun, but they've called me back anyway. That's service.

[Destructo6]

I was too young to enjoy B&B's heyday (HK91's for $400, etc). The few times I dropped by their Orange County location, their service (if you can call it that) was attrocious and selection was pitiful.

[PKAY]

I spent more money than I'd like to divulge here at B&B in Westminster. I even bought my Cannon safe through them. In all the years of patronage, they never once remembered me from any prior visit. I found only one salesperson, Sam Trujilo, to be knowledgeable and friendly. One would think that if you have good repeat customer business, you'd send out sales flyers now and again. Or if you do a good consignment business, you'd want to inform repeat consignment buyers of new and exciting pieces. If you read any of the Gunsmith Kinks books from Brownell's, the last chapters often deal with how to run a gun business, how to treat customers; hell, how to treat people for God's sake. B&B did not have a clue in that department. They routinely charged a couple of bucks more than the state required for DROS. In addition, in private transfers they would hold the buyer's gun for 12 days instead of the 10 required by CA law and charge the buyer and extra $25 for "storage" for the extra 2 days effectively extorting the money by holding the buyer's property and not releasing it even if the buyer presented himself on the tenth day at the appointed time.

I am ambivalent for sure. I don't like to see any gun business go down and especially not due to a concerted effort on the part of local and state governments to drive them out of business. But B&B was its own worst enemy.

[deej]

Last March, agents from the California Department of Justice raided both of B&B's facilities, alleging that the dealer had defrauded gun buyers.

"B&B believes that these acts were a blatant, premeditated and orchestrated attempt to destroy B&B," the filing reads.

Hallye Jordan, a spokeswoman for the Justice Department, disputed this, saying the department had turned up numerous complaints that the firm had charged buyers for personal transfers of firearms, a transaction that should be free.

"We got some complaints from consumers that they were being charged these fees, then we did some sting operations where our agents were overcharged, as well," Jordan said. "We talked to the owners and advised them that was illegal. They were warned, which is what led to the search warrants being served."

I think it's kind of ironic that now the CA DOJ is running around protecting gun owners...

Overcharging for DROS is one thing, but isn't an FFL allowed to charge (there's a limit, but I don't know what it is offhand) for a transfer? Or are FFLs in California supposed to do these things out of the goodness of their hearts?

DJ

[PKAY]

deej - FFL's in CA are required by law to perform private transfers when requested by a seller. The charge, also set by law, is $10 per handgun and $15 per long gun plus $15 DROS (as of Jan 1st DROS went up to $20). So last year a private transfer cost the buyer of a handgun $25 in addition to the price of the gun. B&B effectively doubled that cost charging all private transfer buyers $50 to effect the transfer. NO OTHER GUN STORE IN SO. CAL WAS DOING THIS.

A well run business, gun store or not, will never create Good Will (a company asset like any other) by gouging its customers. Forcing private transfers to go through an FFL may have been a pain for some, but others capitalized on the opportunity to interest both seller and buyer in other products for sale in the store: ammo, holsters, camo, cleaning materials, or even additional firearms. Both Turner's Outdoorsman and Big 5 have done this.

[Quartus]

PKAY, I think you summed up the B&B saga pretty well.

[Elker_43]

"The only thing they can do is finally say we just don't want you to own guns anymore, and then people will know what their true agenda is."

This is why I am fleeing the PRK. Idaho here I come

[KimberLady]

So now we're stuck with Turner's, where you can literally stand for an hour and be continually asked, "Have you been helped yet?" When you answer, "No, I'm just buying ammo," they look confused and tell you they'll get someone to help you.

Repeatedly. Their handgun counter is the busiest area in the shop, and it's so fun to stand and wait while a maximum of two people rush around and look busy while doing nothing. There were even employees from other parts of the shop that would come over and stand behind the counter, diddling around, and then notice my ever-so-intent stare and walk off again.

Iwanted to buy 500 rounds of 45 and 100 rounds of 9mm. I even knew what brand I wanted. Of course, I knew I had to fill out my name address, DL# and fingerprint to buy it, but I wanted to go shooting.

However they made us wait so long that finally hubby and I walked out - and didn't get to go shooting that day. Turner's is heinously understaffed, and they'll let you sit and sit and sit while gangbangers and armchair commandoes sit and examine every pistol in the case and every rifle in the rack (and they've got a lot), while you wait to spend your paltry 80 bucks on ammo.

B&B wasn't much better, and I refuse to patronize the gun store in my home town due to crappy service and nasty help. My buddy told me about a gun store up in Ventura with good service AND selection (my Lord, is there such a thing?)

However, B&B was decent for ammo and not too far from my house. Considering not so long ago that they were picketed by (IIRC) City Council members, it doesn't surprise me that they were forced out of business.

The problem with B&B going under is that the competition (such as it is) now can drive their prices through the roof and there won't be much anyone can do about it. Gunbroker.com sounds better n' better all the time, and my range will do transfers (hallelujah).

[Russ]

PKAY,

Are you sure about the transfer fees? Before I left CA, I lived in Bakersfield for a time. I tried to do a transfer from an FFL in another state. One shop quoted me $50, another $100 and some said they would not do it period. These were the fees in addition to the DROS. Are the transfer fees spelled out in statute?

Thanks

[longeyes]

Try Turner's in Pasadena for range ammo. It's out on a table, self-service. You're out in ten minutes. No thumbprint, etc.

That's two out of the three stores I've bought guns from in the last two years that have gone under. Not a great trend.

[PKAY]

Russ - Private transfer fees are spelled out as stated by statute. However, if you are buying a listed handgun, exempted handgun, or long gun from someone out of state where shipping is involved and your CA FFL has to send a signed copy of his license to the out of state seller, your FFL may certainly charge a fee. The one I use charges $25 in addition to DROS and that's reasonable in my book. But if you and your seller are CA residents and appear in person before a FFL to effect a private transfer, which you have to do in CA now, it's $20 DROS and $10 per handgun (on or off the list). BTW, Big 5 even has the transfer fees for private sales posted on a big white mounted poster with bold black lettering in the gun department of their store here in Torrance.

[HKguy9]

I never got thumbprinted or anything when buying ammo. The only ID I had to show was when using my credit card.

Is this thumbprint thing new? What's the point anyway? I don't see how that will control crime.

[Russ]

PKAY,

Thanks for that info. That clears it up.