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The Connecticut gun shop that sold the Bushmaster AR-15 rifle to the mother of the Adam Lanza filed for bankruptcy. Lanza is the young man who killed 20 first graders and six adults in the infamous Sandy Hook Elementary School massacre in December 2012 before killing himself.

Multiple Legal Violations Found in Store

Although the gun was purchased legally, when law enforcement agents raided the gun shop shortly after the Newtown, Connecticut, tragedy, they found multiple violations of the law. These included missing or false information in its records and documentation that guns had been sold to customers before their background checks were completed.

The store's owner pleaded guilty to two felonies and the store's license to sell guns was revoked. Since it was only able to sell accessories and ammunition after that, business was severely impacted.

Suit Lists Store and Gun Manufacturer as Defendants

The store's owner has declared bankruptcy, stating that he owes nearly $141,000 to creditors and has less than $1,000 in assets, which consists of products. There's also a matter of a lawsuit by surviving family members of those killed at Sandy Hook in which the store is one of the defendants.

Now a judge has ruled that the lawsuit can move forward. However, she granted the request by the store's attorney that it be delayed until the bankruptcy is finalized. She is allowing discovery in the lawsuit to continue, however. The suit, which includes the company that manufactured the gun, Remington Arms, contends that the defendants knew it was intended for military use, but marketed it for personal use.

The gun store's main creditor is Our Nation's Best Sports Corp., which the store reportedly owes nearly $102,000. The other creditor is a gun distributor, which is owed $5,000. All 26 families of the Sandy Hook victims are also listed as potential creditors.

A business's fortunes don't usually change as quickly as this one's did in the wake of the Sandy Hook massacre, which brought unwelcome law enforcement scrutiny. However, when they do, it's essential for business owners to work with a bankruptcy attorney who can advise them on their legal options.