The popularity of the Colt brand since 1836 has become a staple for collectors and admirers world-wide. The Connecticut-based company was behind the development of a pistol still dubbed as the “the gun that won the West.” During the late 90s, Colt saw immeasurable success when the U.S. military invested into M4s for their troops on the front line. As time progressed the popularity of rifle sales declined and capital issues began to surface.
A Chapter 11 bankruptcy typically does not lead to a liquidation of the company. Rather, it is a protective step for companies to battle down their immense debt and reformulate their companies for success.
For Colt, they are looking to manage more than $350 million in debt. Reportedly, per the Wall Street Journal, the company will ask the federal judge to supervise an auction of the business and repay some of their outstanding debts. The company has been slugging up a muddy mountain after facing bills from interest on their bonds. Just in 2014, Colt borrowed approximately $70 million from Morgan Stanley to apply to the interest, but was concerned about meeting their next payment date.
Prior to entering into an agreement with the military in the late 90s, Colt had successfully emerged from a Chapter 11 bankruptcy in 1994. Many are hoping this will also be the case.
Management for the brand has reassured the public that “Colt remains open for business.” The company was trying to combat the mound of debt outside of court and had until this past Friday to come current. That deadline arrived and passed leaving Colt with no choice but to seek protective measures.
Samuel Colt, prior to his death in 1862, was once nestled among the top 10 wealthiest businessmen across the country. When he struggled financially during his time, he would develop a new firearm and create bigger interest in his company. Due to delayed orders from the government and lackadaisical sales, the maker of the Colt .45 is facing a repeat chapter to reformulate their balance sheet.
