Colt has struggled for years to have a balanced budget.As of late June 14th Colt Defense LLC has filed Chapter 11 bankruptcy protection and announced it will sell off its assets.
Colt’s lenders accepted a major cut in their payback even after it failed to make its last two interest payments to keep the company afloat. Colt asked its bondholders to take a 70% loss or face bankruptcy. Today, only a handful of bondholders accepted the deal offered by Colt.
Colt’s Restructuring Officer Keith Maib said the following:
“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, 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.”
The Colt company said that the investment management firm Sciens Capital Management will plant to buy most of Colt Defense so that it can make good on all liabilities and agreements. This bankruptcy came after a full month of 100% effort to turn this old and well established company around and emerge from its crushing debt.
This declaration of bankruptcy will aid this 200 year old company in staying in business.
“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,” said Maib.
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