Photographer: Tim Boyle/Bloomberg

Battle of the Glocks Threatens Gun Giant's Secrecy

The Austrian firearm maker's finances may face scrutiny in divorce battle.

The inner workings of Gaston Glock's eponymous, secretive firearm company may be laid bare in a U.S. courtroom now that a federal judge weighed in on the side of the gun mogul's ex-wife -- and her five-year effort to claw back millions of dollars.

On Monday, U.S. District Judge Thomas Thrash Jr. in Atlanta denied Gaston Glock's motion to freeze Helga Glock's racketeering lawsuit. In it, she claims her ex-husband, and his corporate affiliates, robbed the weapons empire's parent Glock GmbH in a scheme to enrich himself and deny her assets she rightfully owns.  

Gaston Glock (center) and current wife Kathrin Glock at a sporting event in Velden am Worthersee, Austria, on Aug. 2, 2008.
Gaston Glock (center) and current wife Kathrin Glock at a sporting event in Velden am Worthersee, Austria, on Aug. 2, 2008.
Photographer: Blondel/Knipserbande via Zuma Press

Gaston Glock sought unsuccessfully to invoke an obscure legal doctrine to block the suit, saying her litigation overlapped with their prolific 2011 divorce case in Austria. Thrash rejected his invocation of "abstention," sending the case on a path toward trial.

As summarized by the judge, Helga Glock claims her 86-year-old ex-husband "plundered hundreds of millions of dollars" by stealing funds from the company's main U.S. subsidiary, using sham transactions to transfer assets to entities he owned or controlled. 

The judge didn't endorse her accusations; that would be up to a jury. Gaston Glock has repeatedly denied any wrongdoing, suggesting in court filings that his ex-wife's allegations reflect only bitterness over the breakup of their half-century union—and his marriage to a much younger woman.

While Gaston Glock is likely to continue his fight, a trial would risk the public airing of transactions that the businessman may prefer to keep private. As early as 2009, Businessweek wrote about the Glock companies' use of shell corporations to transfer assets internationally in an effort to minimize taxes. Helga Glock, who has access to voluminous internal corporate documents, is alleging those tax-reduction steps were also intended to reduce the value of Glock GmbH and hide assets from her. With the judge's ruling, she may now use U.S. laws to demand even more evidence from the company.

Gaston and Helga Glock began manufacturing firearms in the early 1980s, swiftly making Glock GmbH the most influential handgun company in the world. By the 1990s, Glock had thoroughly penetrated the U.S. market and forced rivals such as Smith & Wesson to imitate its distinctive large-ammunition-capacity, industrial-strength-plastic designs. Today, Glock claims that two-thirds of all U.S. police departments use its notably light and durable pistols. 

 

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