Colt Gets Green Light to Reorganize Following Chapter 11 Bankruptcy

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To some degree, and a 1911 rail gun is a 1911 rail gun, but a Colt is never just another gun.

To some degree, and a 1911 rail gun is a 1911 rail gun, but a Colt is never just another gun.  Check out the review of the M45A1. 

It appears that our beloved Colt Defense LLC is seeing the light at the end of the tunnel following years of financial turmoil.

Colt announced this week that its plan to reorganize was accepted by the United States Bankruptcy Court for the District of Delaware, a key hurdle for a company seeking to get its ducks in a row.

“Today we achieved the last important milestone on Colt’s path to emerging from Chapter 11 as a stronger and more competitive company,” said Dennis Veilleux, President and Chief Executive Officer of Colt Defense LLC.

“We greatly appreciate the dedication and support of our extraordinary employees during this process, as well as the support we received from our financial stakeholders, Sciens Capital and our customers and vendors,” Veilleux added.

The reorganization plan, which will be implemented in the coming weeks, will reduce Colt’s debt, improve Colt’s capital structure and enhance Colt’s liquidity profile. Additionally, the company will have a new lease at its West Hartford Facility.

The plan also “finalizes a global settlement of all outstanding issues in the cases, achieved through a consensus reached among Colt’s key stakeholders, including a consortium of Colt’s secured lenders, Morgan Stanley as the lender under Colt’s pre-petition and post-petition secured term loan facilities, the official committee of unsecured creditors appointed in Colt’s bankruptcy cases, Sciens Capital Management and the landlord at Colt’s West Hartford facility.”

And an another important note, Colt has reached an agreement with the United Auto Workers Union that resolves issues relating to retiree medical benefits.

Well, it appears Colt has righted the ship. The company should enter the new year on the up and up.

{ 31 comments… add one }
  • Dusty December 23, 2015, 5:10 am

    I guess this is good news?… Colt has suffered from myopic management, poor product design(s), and poor product placement. Relying on Federal contracts to pay the bills finally didn’t work out so well. What is that phrase? “Doing the same thing over and over, the same way and expecting different results is insanity”? i.e.- They built 1911’s the same old way for how long, in spite of what the market wanted?… They continued to be yoked to how many versions of a 19th Century black powder revolver; First quality double action revolvers could not be produced at a marketable price point; The Colt 2000? the Anaconda?- nuff said… I read a piece recently on how it will all be better somehow, when stocking gun dealers will have Colt firearms in stock and will promote them. I suspect that if they fail to build a competitive product at a competitive price, they will be reorganizing again in a year or two. So sad.

  • hallla December 22, 2015, 5:36 pm

    Simple, move to Huntsville, AL as Remington did. No unions, high quality of life and low cost of living for employees, highly skilled work force. Alabama is a gun friendly state. Check it out.

  • Danny December 20, 2015, 2:32 pm

    I think it would be a great move to Dodge City Ks where Colt became famous with Earp and Wild Bill and a friendly gun State.

  • Robert C December 20, 2015, 10:00 am

    How ANY gun maker could go bankrupt during these times of record sales of firearms and ammo, is beyond thought. Something FISHY behind the curtain.

  • GaryGary December 19, 2015, 12:46 pm

    The best cost saving could come from leaving high cost and tax New England which has banned most of Colt’s products or will be doing so shorty . There are plenty of counties in NC, SC and FL who would throw out the welcome mat for Colt ! And I’m sure any employee transferring to a warmer less costly climate would gladly accept a cut in pay. New England states are a dead end for firearm manufacturing as is CA and CO.

  • Josh December 19, 2015, 5:24 am

    They could have OWNED the 1911 market if they’d have squashed Kimber in 1995 by simply offering guns people wanted and not just relying on the bone-stock 1991A1 line to carry them. Instead they dallied and didn’t come out with a production grade “custom” 1911 until what 5-6 years ago?

  • Bill December 18, 2015, 10:00 pm

    Bring the Python back problem solved.

  • Bob December 18, 2015, 7:58 pm

    Colt need to move here too the Metro-Detroit area. Michigan is a gun friendly right to work state with a huge manufacturing base already setup.

    • SGT-N December 20, 2015, 10:07 am

      I agree with your comment 100%. Michiganders have the know how, the unions are no longer a problem after the right to work legislation was signed into law, there are plenty of “newish” factories in the Detroit area, as well as Grand Rapids and Lansing (remember GM, Ford, and Chrysler moving to Mexico), and the state has some of the best research universities in the country (U of M, MSU, Michigan Tech, etc.) that would probably work on gun related developmental issues (remember U of M developed the EOTech). If Cabela’s saw fit to open three stores in Michigan, Colt should follow its lead.

  • Jeremiah December 18, 2015, 3:41 pm

    One thing COLT should do to complete their chapter 11, is move out of the West Hartford facility and into a lower taxed, more gun-friendly State. I might even consider buying their stock if that happened.

  • Steve December 18, 2015, 3:04 pm

    I hope their quality improves on 1911’s. I’ve bought several different models in past years and found it easy to cut myself on the slides and frames. Colt charges extra for “dehorning”, while other companies do it as part of their manufacturing process.

  • Paul December 18, 2015, 1:35 pm

    Sad to say but Chapter 11 will not protect Cold from the state of CT. Leave CT and go to a gun friendly state so you can live free and survive.
    All gun manufacturers should leave that state and show them what it’s like to lose their major manufacturing businesses.

  • Dionesius3 December 18, 2015, 11:16 am

    Colt made many mistakes the main one’s being focusing on government contracts and in essence saying to the retail consumer, “Up yours!” “We don’t need or want your business!”
    The company has a very lucrative market opportunity right now in the traditional revolver consumer market. A classic Colt Python, Anaconda, Cobra, trio could bring the company a ton of sales. Follow that with Traditional pump action rifles, Entry level AR’s, Ultimate AR’s, and some new pistol designs in 9MM, .380Acp, .45 ACP, in a concealed carry size single stack pistol.

    Colt has some innovative and proven designs that they have abandoned which would and could pump LOTS of cash flow into their coffers. If they will simply return to being mainly a consumer oriented company rather than a government contract oriented company. In fact a split of the business into a Consumer division and a government contract division would likely be one of the best moves they could make.

    Get after the nostalgia market, get after the concealed carry market, get after the hunting market, and you can turn this thing around quickly. Keep fooling around with the gov. contract market and fail again in ten years. Seems pretty simple to me.

    • Paul Helinski December 18, 2015, 11:49 am

      That is not entirely true FYI. Each gun needs a whole set of new tooling, since the old machines would not be OSHA compliant. That is why they did away with those guns, not because the gangbangers were using them. When I was at Taurus I saw them making MIM parts for a number of different manufacturers. You think that making guns is just a matter of 3D printing or something, but it isn’t. Colt is an American firearms institution and you are better served wishing them well with however they can maintain a place in the market.

  • johnny archer December 18, 2015, 10:22 am

    Colts problem does *not* begin or end with their union.
    The fault lies almost 100% with the private equity group that has owned colt. During the ‘good times’ of the mid-east wars, and the fat military contracts, Colts owners loaded up the company with debt and pulled TONS of cash out against that debt.
    Basically the same reason Colt went BK before.
    I’m not pro-union, (one bit,) and the legacy union costs might be somewhat burdensome; but lets keep the facts straight. When bankers and their buddies buy companies, the 1st thing they do is strip it clean, with no thought to the future. They want the cash NOW.
    That’s the problem.

    • Josh December 19, 2015, 5:21 am

      I agree 100% concerning the direction and concentration they took up over the past 15-20 years but the role the Union plays can’t be underestimated. As an example, even if Colt wanted to blow SAA production through the roof today they’d be VERY hard pressed because of the reorganization of the factory and training employees need to build them. This would mean guys with seniority getting butt-hurt; mandatory pay raises for the guys with new skills, likely having to over pay people who no longer have a “real” job etc.

  • shrugger December 18, 2015, 9:23 am

    Just ask yourself, how does a Firearms manufacturer go bankrupt during the biggest firearms boom in American history?
    Perhaps this wouldn’t happen if they considered the Civilian market now and then.

    • Dan December 18, 2015, 1:26 pm

      Dan—I agree. Colts problems started at the top. They made a great product and then they forgot who made them great. Plain old folks like you need me! If they have the same folks running it as before and they were a public stock company, I wouldn’t be buying any.

  • TVPC58 December 18, 2015, 9:23 am

    Yes, they would be better off down here in NC where Ruger and Remington have already set-up shop. However, Smith & Wesson is doing OK in Massachusetts, so the anti-gun state argument is not the whole story. I believe that Colt will still have the burden of paying out retirement benefits unless they completely go out of business and come back as another entity. Many of these union retirement obligations are ponzi schemes that are bankrupting municipalities and leaving retirees with reduced or no pensions.

    Another thing is that Colt is not a publicly traded company, like S&W is, so it may be more independent, but having the stockholders to answer to may have given them a reality check. I’d hate to see Colt disintegrate…maybe Hillary will bail them out when she gets in (lol).

  • Griffendad December 18, 2015, 8:57 am

    Colt should move about 100 miles straight west over to Allentown/Bethlehem in PA and put those steel mills back in business! We’re gun friendly and it’s right down the street from where Hilary grew up. It would make for interesting Karma.

  • Rich K. December 18, 2015, 8:45 am

    They need to (A) focus more on the civilian market than the military and police (who are even more fickle than civilian buyers when it comes to contractor pricing), (B) stop charging so much for products just because of “name recognition” (why spend $1200 on a 3rd generation Model “P” revolver from the custom shop with inferior quality compared to the 1st and 2nd generation guns, when for half that price you can have a Uberti with better fit and finish? The name alone is NOT a good selling point, IMO, if it’s over-priced and sub-par quality), and (C) turn the original Colt factory into a museum and relocate to a more gun-friendly, right-to-work state. After all, they relocated to Connecticut after the Patterson, N.J. works folded. Tradition is not an excuse to stay in a no-longer-viable location.

  • Terry December 18, 2015, 8:30 am

    Way to go Colt. Can’t wait to shop.

  • Conservative Chuck December 18, 2015, 7:33 am

    Come on down to Texas where we have the right to work and shake off the union problems and we don’t give you hell about guns!!!Colt, Come On Down, and Welcome!!!

    • survivor50 December 18, 2015, 9:14 am

      Part of “Colt” is here already up in the Austin area. It has to be driving the Uber Libs there nuts…

  • Charles Tilley December 18, 2015, 6:58 am

    I hope Colt makes it’s way back to the gun stores , This company is a America Icon .

  • Joe McHugh December 18, 2015, 6:25 am

    Don’t break out the champagne just yet. Colt is still facing some of the problems that brought it to the bankruptcy court in the first place. The number one ball and chain on Colt’s leg is the worker’s Union. When the competitors in China and even our own Southeastern states enjoy lower labor costs, Colt’s only way to reduce cost is to reduce the quality of the product. Quality control issues were already showing up before the company sought the protection of the Bankruptcy court.
    Making a firearm is pretty straightforward, and all of the firearm manufacturing companies are reducing costs by automation and reduction in the amount of human efforts.

    The second strike against Colt is the location of it’s factory. Connecticut is a notoriously hostile state against ANYTHING related to firearms. The company should immediately consider relocating to a gun friendly state such as Alabama or Texas.
    The workers of those states have seen what unions have done for their members, and they generally reject them.

    Colt’s creditors had to go along with the bankruptcy agreement or lose all or most of the investments already extended. I hope that the employees at Colt help the company control its cost of manufacturing. If they return to their old attitudes that the company owes them more than what other workers in other states get, they will only have jobs for a short time.

    The only employment where union organization is secure is government work. Taxpayer money is always available to “enhance” worker compensation and benefits in government jobs. Besides, that employer doesn’t have to worry about making a profit.

    • Josh December 19, 2015, 5:12 am

      It’ll never happen, Moving out of state is their best option but the Union will never let that happen least folks lose their jobs. At the same time they’ll hammer at the company to get every last penny they can. Regardless of the Union though, cost of living is ridiculously high in CT and workers to be compensated well enough to live which is still more than the company can probably afford right now.

  • Doug December 18, 2015, 5:58 am

    Obama didn’t decide to bail out cold? Isn’t it older than the auto corporations that he bailed out? Fascinating.

  • Dave December 18, 2015, 5:54 am

    Wonder if they will finally get rid of “sales to stocking dealers only ” plan-that forced dealers to buy the slow moving guns like defenders if they wanted to buy any Colts, they implemented last summer.
    Most of the distributors I talked with say its cut the sales down by 75% ! I, and most other dealers switched to other names for 1911’s and AR’s that we can buy from distributors with no restrictions. Worst corp idea since the “new coke”

    • Tim December 18, 2015, 7:54 pm

      Man, I hope so! I honestly thought that policy change was some type of cruel joke. I’ve also noticed far less Colts for sale on Gunbroker.com etc.

  • R December 18, 2015, 3:20 am

    so, does this mean the public will start seeing Colt guns actually on the shelves at gun shops? Or are they going to continue to just go after military contracts?

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