Colt Defense, the maker of the so-called “gun that won the West,” filed for Chapter 11 bankruptcy protection on Sunday, June 14, 2015. The company described the bankruptcy filing in a Colt News article on the company’s website:
“Colt Defense LLC (“Colt” and the “Company”) announced today in voluntary Chapter 11 materials filed in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) a process that will allow for an accelerated sale of Colt’s business operations in the US and Canada.”
The company’s bankruptcy petition listed assets of up to $500 million and debt up to $500 million owed to 50 creditors.
The company received a “stalking horse bid” from Sciens Captial Management LLC (“Sciens”). Sciens offered to purchase its $105 million in outstanding loans and as much as $20 million in new loans, according to bankruptcy documents filed on Monday.
Sciens bid does not involve any cash however and attempts to shed more than $250 million in bonds. As a result, Colt would look and operate in much of the same way it does now, except without any bonds. The current management team will remain in place, according to the Colt News article.
An auction has been proposed for August 3, with the opening bid at $0.
Colt was founded in 1855 by Samuel Colt, and encouraged the gun industry to move past single shot pistols. The company was negatively affected by losing a “decades-long” Defense Department contract to provide the Army with M4 carbine rifles in 2012, according to the Inquisitr.