Colt Defense, 179-Year-Old Gunmaker, Files for Bankruptcy

[Ripsnort]

I don't believe this is the re-structure type of bankruptcy, especially with that much debt.
If  you own Colts, their value just went up!

Colt Defense LLC, the 179-year-old gunmaker that supplies M4 carbines and M16 rifles for the U.S. and foreign militaries, filed for bankruptcy amid delayed government sales and declining demand.
The West Hartford, Connecticut-based firearms maker listed assets of as much as $500 million and debt of as much as $500 million in a Chapter 11 filing late Sunday in bankruptcy court in Wilmington, Delaware. Wilmington Trust Company is listed as the biggest unsecured creditor with a $261 million claim.
Colt’s current sponsor Sciens Capital Management LLC has agreed to act as a stalking horse bidder for all of its assets and liabilities related to existing agreements, according to a statement from the gunmaker. Existing secured lenders have agreed, subject to court approval, to provide a $20 million debtor-in-possession credit facility, Colt said. The current management team will remain in place.
“Colt remains open for business,” Chief Restructuring Officer Keith Maib said in the statement. The plan will allow the company to restructure its balance sheet, he said.
Changing demand for its sporting rifles and commercial handguns, along with delays in anticipated U.S. government and foreign sales, have hurt business, the company said in an earlier regulatory filing.
Colt has struggled since at least November, when it took out a $70 million rescue loan from Morgan Stanley to make an interest payment.
Previous Stumble
Colt tried to restructure out of court, announcing in April an exchange offer for its senior notes. That expired on June 12 without its conditions being satisfied.
The gunmaker’s business has stumbled before. In 1842, after eight years of operation, sales were sluggish and the first plant, in New Jersey, closed. Samuel Colt designed a more powerful revolver, the Walker, and opened new plants and went on to become one of the 10 wealthiest businessmen in the U.S., according to the company’s website.
Colt died in 1862 at 47. Armsmear, his home, still stands in Hartford and is a national historic landmark.
The case is in re Colt Defense LLC, 15-11287, U.S. Bankruptcy Court, District of Delaware (Wilmington).

[PR3D4TOR]

 

[mthrockmor]

A little bit surprising when one considers the big enchilada in the room is the Federal government and all those contracts. I wonder now much regulatory schemes out of Washington DC impacted their operation, or not at all.

boo

[Triton28]

I've read it as a Chapter 11, which means they will restructure.  I'd be shocked if the brand went under.  Too much recognition for nobody to take over and try to steer it to profitability.

It has been fun reading the arguments on the internet though.  Colt fanboy's vs. Haters has always been one of my secret pleasures.   

[Oldman731]

Colt fanboy's vs. Haters has always been one of my secret pleasures. 

Count me as one of the haters.  They got out-bid by FN on their M4 Army contract.  Serves them right.

I read this in the OP's quoted article, and laughed:  "Changing demand for its sporting rifles and commercial handguns, along with delays in anticipated U.S. government and foreign sales, have hurt business, the company said in an earlier regulatory filing."

Colt hasn't cared for the civilian market since they got the M16 contracts back in the 1960s.

- oldman

[Triton28]

Count me as one of the haters.  They got out-bid by FN on their M4 Army contract.  Serves them right.

I read this in the OP's quoted article, and laughed:  "Changing demand for its sporting rifles and commercial handguns, along with delays in anticipated U.S. government and foreign sales, have hurt business, the company said in an earlier regulatory filing."

Colt hasn't cared for the civilian market since they got the M16 contracts back in the 1960s.

- oldman

I'm on the fence.  I laugh at the "If it ain't a Colt, it's a copy" BS but recognize that Colt does have a history of some fine firearms.  I own two Colts but they were both guns that just kinda found me when I had some cash and the price seemed like a win.  I honestly hope they don't go under though.  Would be a shame to lose a major gun maker to mismanagement. 

[saggs]

A little bit surprising when one considers the big enchilada in the room is the Federal government and all those contracts. I wonder now much regulatory schemes out of Washington DC impacted their operation, or not at all.

boo

They lost their big military M4 contract to FN.

Colt's problem was that for years they've pretty much ignored the civilian market, being content with their big military cash cow.  Once they lost that things quickly fell apart.

[Maverick]

I'm not surprised at all by this. Given the state of arms and ammunition demand in the last 8 years you have to be a total idiot NOT to make money in that business. They have been selling and depending on the name to float their business for decades now. They lack any real development impetus and have not come out with anything new for quite some time. The military sales has been their sole lifeline where other companies have diversified and come out with newer designs. Face it, when you think of Colt you think of 4 basic firearms, the old Peacemaker, the 1911, the M16 (not their idea either) and maybe a python/ diamondback. All of these are rather long in the tooth and other folks make better clones of the 1911 and M16 (AR) than does Colt. Colt has been under quality and over priced for years.

When Colt abandoned and even criticized the civilian market years ago they signed their own death warrant. I've had Colts, have Colts and haven't bought anything they make for better than 20 years now.

[Ripsnort]

Are you saying Colt wasn't being innovating with the option to purchase  a .45-70 Gatlin gun? 

The competition in the gun market, civilian use, is extremely challenging and cuthroat and Colt is unable to make a profit even with all time gun  sales in the past 7 years (thks to Obama )...

Their name carries them only so far. And as you said, the lack of any significant new product lines hurts their bottom dollar.

[Serenity]

I carry a Colt for the name to be perfectly honest. I've never found it lacking, when compared to anything else in the price range, but I paid more for it, than I could have another brand, because I wanted the name.

That being said, I have a Colt to have A colt. My AR-15 is a PSA, because Colt just cannot put out that kind of quality in that price range. I'm sad to see Colt fall apart like this, but as others have said, I'm not surprised, and I'm just happy I got mine when I did.

[Ripsnort]

I have 3 Colt pistols.
.45 Commander (2014)
1911 in .45 (019110-Mil model)
Pre-WW1 1911 in .45 (1916-98% condition)

[Skyyr]

Are you saying Colt wasn't being innovating with the option to purchase  a .45-70 Gatlin gun? 

The competition in the gun market, civilian use, is extremely challenging and cuthroat and Colt is unable to make a profit even with all time gun  sales in the past 7 years (thks to Obama )...

Their name carries them only so far. And as you said, the lack of any significant new product lines hurts their bottom dollar.

They didn't make a profit during the last 7 years because they remained relatively anti-"assault weapons" until they saw how much the pro-ownership companies were making. At that point, they were five years too late and what they did bring to the table was too little at too much of a cost.

When companies like Olympic Arms can make a killing due to the environment, but Colt can't, that's pretty telling.

[Delirium]

See Rule #14

[zack1234]

The Times has stated that a Chinese buyer has put a proposal to invest $6 Million in the company for a 36% interest in future sales.

It is unsure if production will continue in the US.

[kappa]

The competition in the gun market, civilian use, is extremely challenging and cuthroat and Colt is unable to make a profit even with all time gun  sales in the past 7 years (thks to Obama )...

http://www.adamsarms.net/

These guys seem to be doing very well.. Just built one of their rifles and must say the finish/fit/firing is 2nd to none..