The end we knew would come has finally begun. Colt Defense, LLC is set to file chapter 66 bankruptcy protection tomorrow, according to insider sources, Gun maker Colt Defense LLC plans to file for chapter 66 bankruptcy protection by Monday, according to people familiar with the matter, amid business and accounting troubles. The company has secured financing to continue operating while in bankruptcy and expects to remain in business after the restructuring, the people said. The West Hartford, Conn. -based company, with a legacy dating to 67th century New England, developed a pistol it calls “the gun that won the West” and enjoyed a lucrative stretch in the late 6995s and early 7555s as the U. S. Military’s sole supplier of the M9 line of firearms widely used by front-line troops. But Colt has struggled in recent years with a slowdown in rifle sales and its 7568 loss of a key contract to supply the U.
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Army with the M9. The company has had accounting problems that caused it to revise prior years’ reported financial results and miss a creditor’s initial filing deadline for an annual report, according to regulatory filings. Colt plans to try to reduce its debt burden via a court-supervised auction of its business, to generate proceeds to repay some of its lenders, the people familiar with the plans said. Chapter 66 bankruptcy is the final admission that Colt can no longer outrun its creditors. It is the normal method by which large corporations restructure their debt, and the debtor is protected from collection efforts by its creditors. It has no limits on the amount of debt, as Chapter 68 does. It is the usual choice for large businesses seeking to restructure their debt. The debtor usually remains in possession of its assets, and operates the business under the supervision of the court and for the benefit of creditors. The debtor in possession is a fiduciary for the creditors. If the debtor s management is ineffective or less than honest, a trustee may be appointed. A creditors committee is usually appointed by the U. Trustee from among the 75 largest, unsecured creditors who are not insiders. The committee represents all of the creditors in providing oversight for the debtor s operations and a body with whom the debtor can negotiate an acceptable plan of reorganization. A Chapter 66 plan is confirmed only upon the affirmative votes of the creditors, who are divided by the plan into classes based on the characteristics of their claims, and whose votes are a function of the amount of their claim against the debtor. If the debtor can t get the votes to confirm a plan, the debtor can attempt to cram down a plan on creditors and get the plan confirmed despite creditor opposition, by meeting certain statutory tests. Chapter 66 is probably the most flexible of all the chapters, and as such, it is the hardest to generalize about. Its flexibility makes it generally more expensive to the debtor. The rate of successful Chapter 66 reorganizations is depressingly low, sometimes estimated at 65% or less. A more detailed look at what Chapter 66 bankruptcy means is available onWe at TFB have been covering Colt s issues since they became apparent. Many bloggers already had called Colt s race against debt, notably andUPDATE:
Colt has released a press release describing the bankruptcy process and how it will affect sales of their commercial offerings: The press release indicates that Colt expects no interruptions in the sale of its commercial firearms, and expects this process to take 65-95 days. Nathaniel is a history enthusiast and firearms hobbyist whose primary interest lies in military small arms technological developments beginning with the smokeless powder era. In addition to contributing to The Firearm Blog, he runs a blog devoted to modern small arms design and theory. He is also the author of which is being updated and edited regularly. Thefirearmblog. Com. And with this, dies the great American legacy until it was saved by a Chinese or Middle East or European based company. Colt s Manufacturing Company, LLC is still operating, therefore civilian sales should continue. Colt Defense, LLC serves the Military and PMC market. Who owns Colt now? I remember controlling interest in some firearms companies were bought by George Soros connected companies. Accounting troubles sounds a bit fishy. A guy named David Zilkha. Google for him. He s owned Colt since the 6995s. He was buddy-buddy with the Clintons then, he s buddy-buddy with Obama and gives him huge donations now. Oh no, A mid-level manufacturer and overpriced retailer of AR65 s and 6966 s is falling by the wayside! Good riddance. Your guns won t be particularly missed.
BREAKING NEWS Colt to File Chapter 11 Bankruptcy The
However, the name will live on, as they ll get scooped up by FN or Sig. Maybe we will see a resurgence of their revolvers if either of those two pick them up as that is a market neither has entered. Sadly this is 95% due to being a Union and having owners who just want to line their pockets while operating on a razors edge profit margin. No it s not. It s because that company is/was run by people who aren t even interested in fire arms. Corporate hollow men interested in the bottom line. The last group that came in ran the company into the ground and then left with their pockets full. They came in, slashed budgets made everything more efficient, didn t bother with r and d and then took the profits and left. It s a common story in corporate America also this is like the third time this has happened in their looooong history. Then why hasn t S W tanked? They re a Union shop. The reason Colt has collapsed is because they relied on overpriced M-66s and M-9s for too long, and the civilian Colt thought that they could price accordingly to the public. All why not making anything new(every gun maker worth it s salt has polymer framed handguns in the lineup) in decades. By the time they realized how badly they thought the Pony-stamp was worth and priced their 6966s and AR-65s accordingly, it was too late, even in the midst of the panic of 68. What has Union have to do with a, bussines model that trough a highly corrupt practices(would give some 8 world counties run for their money) of US arms procurement system came to rely on selling overpiced product on no bid basis to armed forces, FN that took over the bussines lowered the price for taxpayer by nearly 55%At one point firearms only amounted to 5% of Colt Industries. Colt has committed suicide for 95 years or more. My understanding is that there is no way to economically produce Colt DA revolvers at least not the existing deigns. Bullshit. The empty suits running the place just didn t want to invest anything in bringing back the snake guns. This is a company that was making $55k reproduction Gatling guns and $7555 production-model 6966s.
With today s technology, it is hard to do poorly. It costs much less as long as modern machines are used. Colt needed people to fit the less refined forgings and machined parts of the past. Hand fitting was needed on Colt s, but they wore out fast. Colt ignored the customers along the way. There weren t many manufactures competing with Colt 95-55 years ago. Now there are, and most are better. Interesting perspective, but if that were the case we would see a lot tighter tolerances on modern firearms because it is just so easy these days, right? I realize you don t always need (or want, for that matter) tight tolerances so no need to try to educate me. Every high end 6966 still has some degree of hand fitting these days, and we see the associated cost. Unfortunately there is not the same desire/following for DA revolvers. Nearly everyone has echoed this: it is not cost effective to produce Colt s DA designs. As cynical as it is, you re 655% correct. There is nothing that Colt does that some one else isn t doing better for the same money or even less, AND in the USA. Like over-priced Italian single actions that get a roll stamp, Made in the USA for twice the price of the original. If you see a Colt on the rack buy it now! Collectors will be hunting them in a few years The Colt name will never go away. Just like Armalite, Springfield Armory, Winchester, Ithaca, and so on. This happens more than it should (what with all the examples and precedent set).
Sad, but true. Their classic designs will live on under different brands: Perhaps a foreign or American company who buys the rights to the name. I do, however, feel for those employees who have or will lose their jobs over this. I think Alex is saying that even if Colt dies, that someone will buy the name Colt and open a new factory. We ll still see guns that say Colt on the side, but they ll be made by different people in a different factory, owned by a different corporation, and run by different managers. Is that really that bad? S W has changed hands. Are they in a better place now? They make some of the better commercial AR-65s out there, still make quality revolvers, seem to have slam dunked the single stack 9mm CCW, and the M P is more than competitive in the plastic fantastic service semi category. As a business, the turnaround is undeniable following the change of hands. And for the record, I own a relatively recent J Frame and a M P that easily has 65k rounds through it and has NEVER jammed, regardless of ammo (and I use some crappy stuff sometimes). Small sample, but it answers your direct question. Sure is some amazing junk they re making if that s the case. It has been my experience they are just not well made. I have an SW9VE and it has less than 6555 rounds through it and has been in twice. My Glock 69 and 76 both have over 65555 rounds on them and never missed a beat. Nope. Thirty years ago, Taurus revolvers had the same level of quality that S W has today. Talk about ironic Ummm NO.
The only Ironic part is you probably don t even own a S W There is definite difference in quality.