Utah-Based Vector Arms Files for Bankruptcy - WSJ (SWHC)

Sturm Ruger (NYSE: RGR) and Smith & Wesson (Nasdaq: SWHC) are on watch Friday following reports that Vector Arms has filed for bankruptcy.

According to the WSJ, Vector was locked in a three-year legal battle with convicted felon Ralph Merrill. The dispute is to whether or not Merrill sold the company's gun-making equipment and inventory to current owner, Jason Maughn. The transaction was said to take place in 2011.

Merrill lost his arms-making license after trying to use China-manufactured bullets to fulfill a $298 million ammo order from the Afghanistan Security Forces.

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