Colt Defense Files for Voluntary Chapter 11 Bankruptcy
Colt Defense has been a hot topic for the past couple years now with people wondering what will happen to the iconic company. Just a few months ago they announced the re-introduction of their Model 1903 and Model 1908. Two years ago they unveiled their sweet-looking and phenomenal operating Close Quarters Battle Pistol which is given to our Marine Corps Operators and Forest Recon military men and women. They also have held an exclusive M4 contract with the United States military since the early 1990s which has kept them plenty busy until 2013 when they lost that contract to FN Manufacturing (or more popularly FNH-USA). Most recently though (specifically today) they announced that they will voluntarily file for Chapter 11 Bankruptcy. This sounds horrible, and in most instances or situations it is, but for Colt Defense this is a strategic move that should establish them to be stronger in the future.
Their own timeline is to be financially healthy with a stronger balance sheet within 60 – 90 days. Keith Maib, who is the Chief Restructuring Officer of Colt Defense LLC, stated this: “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 way that they are going to accomplish this is through increased funding or sponsoring from their current sponsor of Sciens Capital Management, LLC. They will incrementally, or in an increasing fashion over time, put forth $20 Million to fund the operations of Colt Defense. Colt is also extending their lease for the long term at their West Hartford, Connecticut facility and campus. Colt Defense is reassuring all of its employees and the surrounding community, which greatly benefits from their presence, that they are going nowhere; they are here to stay!
So here are all of the take-home messages when you’re discussing Colt around the water cooler:
- Colt Voluntarily Filed for Chapter 11 Bankruptcy – No One Forced Them to do This, and it is a Strategic Move to Improve their Standing in the Industry
- Colt will be Charging Forward Strong Again within 60 – 90 Days – Stronger Balance Sheet, Stronger Backing & Stronger Morale
- Colt is receiving $20 Million of Incremental Sponsoring to Ensure this Will Work
- The Chapter 11 Bankruptcy will NOT Hurt or Negatively Impact Colt’s Employees, Vendors, Suppliers, or Customers – Expect Everything throughout this Time to be “Business as Usual”
And in the interim, I would suggest to everybody…