Gun maker Colt Defense LLC filed for chapter 11 bankruptcy late Sunday, allowing for a quicker sale of operations in the U.S. and Canada.
In its filing, the company estimated that it owes up to $500 million to up to 50 creditors. It also listed assets of up to $500 million.
The West Hartford, Connecticut-based company said it secured $20 million in financing from its current lenders and will continue to operate while in bankruptcy. The entire restructuring process is expected to be complete within 90 days, after which Colt plans to remain in business.
“The plan we are announcing and have filed today will allow Colt to restructure its balance sheet while meeting all of its obligations to customers, vendors, suppliers and employees and providing for maximum continuity in the Company’s current and future business operations,” said Keith Maib, Chief Restructuring Officer of Colt Defense LLC, in a statement. “While entering Chapter 11 protection in the absence of a consensual agreement with our noteholders was not our preference and we do not take it lightly, we are confident it is the best path going forward and will enable us to continue to gain traction on a challenging but achievable turnaround in our business performance and competitive positioning in the international, U.S. government and consumer marketplaces. Importantly, Colt remains open for business and our team will continue to be sharply focused on delivering for our customers and being a good commercial partner to our vendors and suppliers. We look forward to successfully executing on this plan, which provides a sound path of stewardship for an iconic American brand and the key stakeholders we serve.”
Colt selected Sciens Capital Management LLC as its "stalking horse," or lead bidder, in the sale.
In a statement, Colt said it will be able to reassure its employees of its commitment to continued operations in West Hartford through a long-term extension on the lease for its manufacturing facilities and campus. Union-related agreements will also be unaffected and employees will be paid all wages, salaries and benefits on a timely basis.
The current management team, which has been led since October 2013 by President and CEO Dennis Veilleux, will remain in place throughout the process.
The company was founded in 1855 by Samuel Colt and the revolvers it produced helped propel the firearms industry away from single-shot pistols. More recently, it was a supplier of the M4 carbine to the U.S. military.