Colt remains open for business and anticipates no impact on customers as it enters voluntary Chapter 11 bankruptcy, which will allow for quicker sale of operations in the U.S. and Canada. The filing ends long-time speculation about whether the iconic firearm manufacturer would be able to successfully emerge from its financial woes.
It has been reported that in its filing, the company estimated it owes up to $500 million to up to 50 creditors, with assets listed up to $500 million. “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 posted on the Colt website.
Maib said that entering Chapter 11 protection, while not their preference, is the best path going forward as the company focuses on improving its business performance and competitive market positioning. He said the team “will continue to be sharply focused on delivering for our customers and being a good commercial partner to our vendors and suppliers.”
Colt’s private-equity backer, Sciens Capital Management, will act as a “stalking horse bidder” and acquire Colt’s assets. Colt’s existing secured lenders have also agreed to provide $20 million in incremental financing to fund operations.
The entire process is expected to be complete within 60 to 90 days.