Colt to File Bankruptcy by Monday – WSJ

Original article here:
http://www.wsj.com/articles/colt-defense-to-file-for-chapter-11-bankruptcy-protection-by-monday-1434310925

coltbankruptcy

Gun maker Colt Defense LLC plans to file for chapter 11 bankruptcy-court protection by Monday, according to people familiar with the matter, amid business-execution issues and a heavy debt burden.

The company has secured financing from its existing senior lenders to continue operating while in bankruptcy and expects to remain in business after the restructuring, the people said.

The West Hartford, Conn., company, with a legacy dating to 17th century New England, developed a pistol it calls “the gun that won the West” and enjoyed a lucrative stretch in the late 1990s and early 2000s as supplier to the U.S. military of the M4 line of firearms widely used by front-line troops.

But Colt has struggled in recent years with supply-chain and working capital issues, a slowdown in rifle sales and its 2013 loss of a key contract to supply the U.S. Army with the M4. As a result of some of its operational issues, 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 $355 million 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.

… Article by Matt Jarzemsky @WSJ

{ 61 comments… add one }
  • Larry Abrams March 5, 2017, 11:47 am

    Colt always seems to price themselves out of business. I buy used colts if I can find them even then they are priced way to high. They are their own worse enemy when it comes to business management.. Get back to quality and the prices down to where the average Joe can own one.

  • CRAIG SHANE June 17, 2015, 1:26 pm

    One of the finest if not the finest collections of Colt memorabilia was housed in the Library of Hartford Conn.They sold the whole collection including the insignia(horse) that sat atop the original factory. The people of Hartford and the State are IDIOTS!!!

  • Don June 17, 2015, 1:07 pm

    Colt should move to Nevada and start making 1873 Winchesters and Single Action Army Frontier Six-shooters for all of us wannabee cowboys. Unions outlived their usefulness long ago when the Mafia took them over and helped drive good jobs to China and other shit-hole places.

  • thunder June 16, 2015, 10:14 am

    Going to throw this out to all of us old enough to remember the Clinton Ban … Who was 1sst to Jump into bed with SSlick Willie to cut back on civilian sales to ensure gvt. contracts ? COLT . was the answer it took some time to research , but Yes Colt did jut that . And Smith & Wesson was 2nd to cozy up to Slick Willie . Luckily S&W is under new leadership that saw the error of being too cozy with anti gunners of 2nd amendment rights . Every Cop in America carried a Colt or more likely a S&W . Now look . What do Departments all over America carry ? Fire Arms that have been ahead of the curve in Fit , Function and warranty . Smart leadership that MOVED the facilities here in The States using American Workers ( that basically have been burned by the unions ) willing to produce American workmanship for the real buying public The American Blue Collar Worker . * btw ,,just heard that The Teamsters (local Mobsters ) is going to REDUCE their workers pensions , BUT the Teamsters ( U.S. Court Records) Leadership that draws 2,3and even 4 full pensions WILL NOT SUFFER A DIMES LOSS .. Should this be telling Colt to relocate ? The Southern States seem mighty inviting ! God Bless Texas !

  • Jim June 16, 2015, 4:35 am

    All Colt had to do was keep doing what they did best. Why did they stop making revolvers? I felt this coming on many years ago when they gave up .I am the proud owner of their Officers Stainless Double Eagle , It was Colt’s first and last attempt to come into the light and compete in modern gun making.

  • Scotty Gunn June 15, 2015, 1:26 pm

    It breaks my heart to see a famous company like Colt slide downhill. However, they have been doing it to themselves for decades. Arrogance ran the company. Once they got the m-16 (and later the M-4) contracts they stopped trying. Or they’d get an idea and drop everything to push that one item. Plus a lot of market failures. Double Eagle, Colt 2000, etc. Now, the mainstay, the 1911 platform, costs over a thousand, and will be beat by Kimber and others out of the box. They do have some good people there, but it seems there is someone’s ego creating a choke point somewhere. Just my opinion from the outside looking in. Example, though. The 1903 re-introduction. It’s only a limited run, in 32 acp (so I’ve read). Do a large run in .380acp, and keep the price down to affordable. It’d be popular….fun to shoot, and not a bad carry gun. Winchester went down the Limited Edition road (more every year). Look where that got them?

  • BRASS June 15, 2015, 12:54 pm

    Again? Again Colt has failed to diversify and has lived off military contracts for years. It has refused to move to gun friendly states where the costs of production and taxes are lower. It refused to modernize until forced to do so. Many of it’s products are still not competitive in the marketplace as a result of clinging to its geographical and organizational roots.
    It has a great legacy but legacy won’t pay the bills or employ people. Move to a southern or western state with a business friendly environment, a gun friendly environment; avoiding union activity, adopting the newest technologies, diversifying it’s product lines, competing in the marketplace for sales, creating new and exciting products are what it needs.
    I like colt and wish it to survive, it’s an important part of American history. That said, if it refuses to compete, diversify and take those actions necessary to not only survive but grow, then it’s time has come. It’s investors, employees and suppliers need to face the fact that they need to take a deep breath, regroup and move on.
    Colt can’t survive on the AR and 1911 platforms alone, especially at the price point and quality levels they have historically been at. And selling licensing rights to knives and hats is one small component, but not the answer.

  • Durco June 15, 2015, 12:42 pm

    The history of gunmaking is a history of bankruptcies…… This is nothing new and likely won’t be the last.

  • William Ressegue June 15, 2015, 12:01 pm

    Just a dream of course to have Ruger buying the Rights to manufacture Colt’s

  • Hambone June 15, 2015, 10:51 am

    Did you ever think,this is B.H.O.’s way of gun control. If you can’t take them away,we’ll just stop making them. I wonder who’s next on the hit list S&W?

    • thunder June 16, 2015, 10:52 am

      Crawl into a Snakes hole …… and expect to get out ? God , Guns , Bullets and Beans , built our country . Move South young man ! Steel Mills Unions , Auto Makers Unions and Teamsters BROKE our backs and the backs of our children Greed and Politicians Broke our society . Looks like only anything south of the Mason Dickson line will survive .

  • Ed H June 15, 2015, 10:50 am

    Colt has sealed there own Fate when signing up with the federal government. I will not carry their products in my shop. They brought a plan to us small gun shops that sealed their own fates. You had to buy so many of certain firearms and keep so many on hand so you could be a stocking dealer. The firearms they want you to sell are to expensive or nobody wants them. Me personally I can’t stock something I can’t sell. They sealed their own fate.

  • Dr. Harry J. Maue June 15, 2015, 10:26 am

    There are a lot of good comments above unfortunately that’s all they are and non of us really know that true facts. One thing is for certain no gun manufacturer should remain in operation in Connecticut one of the most anti gun states in the union. They should have and still can take the Governor of Texas offer to relocate to his state wherein he made them some very lucrative tax and operating incentives. Colt should have moved to Texas decades ago it’s a better fit for the company that for a marketing and product positioning standpoint is a more natural fit and it’s not to late. This company will emerge from bankruptcy stronger and hopefully wiser and get out of Connecticut that’s a top priority and every gun manufacture should get out of that state.

    • Aaron June 16, 2015, 10:27 am

      They aren’t in the union. They seceded when they denied the inalienable rights of the Americans living and traveling there. Connecticut is not in America.

      • Jack March 3, 2017, 7:28 am

        Neither is the west coast, the Calwilfukya poison has spread to Oregon and Washington, Trump might as well continue his wall all the way up to Canada on the east side of these states.

        • Gregory Harrison March 3, 2017, 4:51 pm

          I agree about the extended Trump Wall.

  • Marksman54 June 15, 2015, 10:20 am

    It’s a Shame that Colt has let it come to this. There are so many people on the civilian side of the Market that just love the 1911 Colt’s in all there different configuration me included ( owning several older model 1911 Colts ). Maybe (COLT) you should of followed the Civilian Market instead of putting you egg’s into one basket with the military contracts. Maybe you should try to relocate and try dropping your prices so you are more competitive in the market there are too many other company’s offering 1911’s with more bell’s and whistles for lower prices. You can’t live off of Heritage in this day and age. People are looking for more bang for the bucks in this Day & Age. Sorry to see such a Great Company with so much Heritage fall by the wayside.

  • M376X6 June 15, 2015, 10:02 am

    I find it hard to believe that over the last several years where firearms were in short supply and selling in greater quantities than ever before that Colt could somehow get so mismanaged that they now face bankruptcy.

  • donald comfort June 15, 2015, 10:00 am

    Great news, hope they go totally under. This is what they deserve for being soo cozy with
    one of the biggest anti gun states in America. I hope people quit buying their products .Any
    Gun Maker who supports and pays lots of $$ in taxes to a state that is against firearms and
    tries to eliminate honest citizens from buying and using them , yes you can NOT walk into
    a store and buy ammo in Commieneticut without the states permission,needs to be boycotted.

  • D Hicks June 15, 2015, 9:56 am

    I also agree with most of the comments, I bought my 1st COLT .45 when I was 16 years old,I’m 58 now. You hear other buyers naming different companies pistols and rifles as better or less pricey,that may be,but if COLT does go under I’ll be a little sad about it.

  • Kevin June 15, 2015, 9:52 am

    This company needs to move to a gun friendly, right-to-work state. Whomever buys the company (not real estate) needs to hire new workers and get rid of the United Auto Workers Union.

    I agee, they need to focus on a “civilian first” strategy, as that’s where the profits are located. Look at Ruger, they don’t chase Govt. contracts, but constantly bring out new models and refine and innovate. I heard once, that 70% of some gun companies sales are “new” products, Colt needs to do the same.

    While they are at it, they need to figure out how build a decent SAA, as USFA (who makes plastic crap now), smoked them in quality and historical accuracy.

    Good luck, if they keep the same people and stay in the “People’s Republic of Connecticut “, they are doomed.

  • Philbert June 15, 2015, 9:50 am

    Sounds like Colt has as many internal issues as market issues. Someone will by them, cleanup the mess, and then they should move to a second amendment friendly state and bring back their civilian firearms. Re-introduction of the Diamondback and Python would produce enough sales to lift them off their back.

  • Pete June 15, 2015, 9:36 am

    Its a union shop. Can’t expect to overpay under productive workers indefinitely and still make a profit. Entitlement mentality has proven again to be a failure. Or, Colt needs the pseudo bankruptcy to break the union and move south.

    What is Ruger, Charter, Taurus, SmithWesson, KelTec, Kahr, Springfield… doing to stay in business? Give the consumer what they want and at a price they can afford, with hassle free warranty repairs.

    Can’t ride the coattails of an out-of-time over-hyped Python forever. “History” doesn’t keep a company alive. Innovation and profit does!

    • TPSnodgrass June 15, 2015, 10:24 am

      Your analysis of Colt’s debacle in business is SPOT-ON. Between being a union whore, “exclusive governmental contractor”, and insisting on staying put in CT, this is well deserved.

  • donald butterbaugh June 15, 2015, 9:30 am

    MBA’s at work again! American managers destroy more companies with their greed and lack of long range planning than any place else. Just look at the banking business, the car manufacturers, Eastman Kodak, the air line industry. Every thing is structured to yield short term gains, and to maximize the CEO’s bonus, the hell with the workers or long term life of the company. If they screw up they get a golden parachute and go looking for the next sucker.

  • Griffendad June 15, 2015, 9:22 am

    Busines practices aside, the name shouldn’t die. It’s too American.
    They should take all the gear and go due west over to Bethlehem/Allentown. Put some of those folks and mills back to work. Plenty of resources and it’s still a free Commonwealth.

  • Thunder June 15, 2015, 9:12 am

    Colt was EXCUSIVE to the U.S. Military in sales . Generally higher in retail price and Very Restrictive in parts sales . All the while every other small AR mfg. found ways to sell parts Uppers and Lowers *ie just try to buy a Colt lower ,,,separately ..catch my drift . And we all know the graft it take to become the SOLE supplier to the U.S. Gvt. Pay-Offs from Lobbyists to the Generals in charge of procurement / contracts . Now let us look at Rock River that on a contract for a certain Agency . You ( public) can order off the R.R. website . Uppers and Lowers , internal parts , external parts . Sales of ” parts ” alone have a much stronger market than the entire fire arm , everybody knows that . In todays ” Build your own Custom ” rifle market , with colts savvy as a leader in modern AR market , well ,,,, something ( Colt ) ,,,If it looks like a Duck , Walks like a Duck …. I just find it hard to believe that The Leader in the AR and Handgun market could NOT see the shortfall in management and finances . Especially when the AR market is so strong right now and Colt is so tightly meshed with the gvt, ( small cased on purpose ) , I foresee a HUGE BUCKET in which to BAIL OUT and the tax payer is again going to supply the funds for a GM style BAIL OUT ,,,, Kind of like it was planned well in advance . WAR,,, Sole supplier , 2 different areas of operation , Looks like a DUCK to me . anyone else see that DUCK ???

    • arnold June 15, 2015, 12:31 pm

      Colt has a long history of short sightedness. They were at one time had full advantage on single action hand guns, but ignored their product, did no improvements and allowed Ruger to get the market. They had the 1911, ignored their product with no improvements and allowed Kimber and many others to get the market. They had the AR 15 and ignored their product and allowed many others to get the market. The same with small autos, such as the Pony and revolvers which at one time were the best. Bad business leadership is Colt’s problem and has been for decades.

  • Ronald Gervais June 15, 2015, 9:04 am

    I agree with the posters above who are feeling a bit of schadenfreude with Colt’s troubles. With their neutering of their Sporters years before the AWB and large pin uppers/lowers they made it clear they had disdain for the civilian market.

    With sales records set by other manufacturers during this period there is no reasonable excuse for the bankruptcy. If you are a gun or ammunition company that could not make money since 2008 your company is horribly inefficient and probably top heavy in management. The restructuring will hopefully allow the new company to cut that fat out. But what will probably happen is upper management will head out the door with golden parachutes leaving their creditors in the lurch.

  • bustedknee June 15, 2015, 8:58 am

    Colts’ history had been government contract after government contract after government contract.
    After each contract/war they take a downward spiral but get bailed out with the start of each new contract/war. It seems to me their public sales have always been secondary to their operating policies.

    Now that anyone can build a “military” rifle in their garage hundred of very capable companies have sprung up across the country dislodging Colt from the government teat by making better guns for less money.
    I find it sad that It was not Colt that perfected two of the most popular guns ever invented, the 1911 and the AR.

    I own and shoot several Colts but I will not shed a tear at their passing. They never were “my” gun company.

  • Buwammi June 15, 2015, 8:54 am

    It’s a shame..the end of an era..My grandmother worked at Colt dfuring WW2..It just shows how nothing is safe and everything is subject to change..Too bad..It gives me a sick feeling in my stomach to see iconic companies like Colt go under…Unfortunately nothing stays the same but it makes me worry about this countries economic future..These companies leave and no others come forward to take their place..Bad sign..It all adds up to trouble…Good thing we have congress to straighten it all out…Yuk,yuk..

    • Captain Jim June 15, 2015, 11:14 am

      I have seen a whole handful of new manufacturers come up to the plate in the past 5-6 years! More than have gone away, that is for sure!

      • wrozzy June 16, 2015, 5:14 pm

        but not in Connecticut. Most businesses are abandoning the Chicago Area as fast they are in New York. With all their laws and taxes due to bad political practices and forgetting about your constituancy you can’t own a business in these places. So long Cowboy!

  • Aaron June 15, 2015, 8:42 am

    I wouldn’t buy guns from a place that seceded from the union just to deny rights to its citizens.

    • Richard June 15, 2015, 12:53 pm

      Typical Yankee response read the history if you can still fine an real history book.

      • Aaron June 16, 2015, 10:25 am

        Connecticut seceded when they denied the right to self defense to the Americans living there.

        What makes you think I’m worthy of an insult based on my indictment of Colts decision to stay in a state that seceded?

      • thunder June 16, 2015, 10:30 am

        Don’t you mean Social Studies book ? The socialists replaced the History book decades ago … P.C. Social Studies book . I sooo agree with you IF you can find a History Book ! Thank God for archives on the net …. Ever notice how the history changes from one book to the next ? And the socialists teachers did not say a word about it ! New history is changed right before our eyes and nobody says a word . * Took me hours on the net to search out which gun companies sided with Slick Willy and why . Just like the X Files ……….. It’s out there …….. God Bless Texas !

    • wrozzy June 16, 2015, 5:08 pm

      What????????????
      I hope you’re not talking about the civil war! There was a lot more a stake than slavery. The New England States are turning so liberal they are considered socialists.

  • Walter Anderson June 15, 2015, 8:17 am

    Personally I hate to see Colt or any other American gun manufacturer fail for any reason. If I were on Colt’s board I would insist that as part of the reorganization the facilities and corporate headquarters be moved to a gun friendly state. CT doesn’t deserve the revenue.

    • W June 15, 2015, 11:07 pm

      would this be the same CT that bought 47% of a stake in Colt to keep their doors open in early 90’s till a buyer came along??? FAIL…

  • Gary Crispens June 15, 2015, 8:13 am

    Colt made a decision NOT to sell to civilians while getting fat on the Government contracts. When you put all of your eggs in one basket …….

    • Rattlerjake June 15, 2015, 8:29 pm

      I’ve NEVER bought a “new” colt firearm because they were always far too overpriced.. The only colts I bought were previously owned, only bought because the price was right used. Colt is typical of companies that become mismanaged, greedy, and fail to pay attention to the consumer. RIP colt.

  • T Storm June 15, 2015, 7:40 am

    Hey Colt, you are responsible for your own undoing because of your failure to listen to your loyal customer base. Instead you thought you could ignore the civilian market and focus on your US Gov’t contracts. Ha! How’s that working out for you today? RIP, rampant pony.

    • Usr8 June 15, 2015, 8:29 am

      Damn skippy.

    • gary polodna June 15, 2015, 8:39 am

      Colt has been for sometime now, an overpriced gun manufacturer. The AR 15s made by other firms are just as good or even superior to Colt’s and from 3-5 hundred dollars cheaper. Their pistols prices have allowed S&W to replace them in the civilian category. The 1911a Colt pistol is over 100 year old technology. (still the best) but the prices still keep them from selling well. This day and time if you can’t compete, you should fail. If they can’t sell to the dod an inflated rate, it just shows you how pitiful their business practices were for a long time now.

      • JCM June 15, 2015, 11:02 am

        When you have companies like Ruger and Smith & Wesson, Springfield Armory making quality guns for near half the cost of Colt equivalent guns and folks having to watch what they spend, they will buy that Ruger or what they can afford.

      • JL June 15, 2015, 4:15 pm

        I agree with Gary. I haven’t bought a Colt product since a Delta Elite back in the 90’s. For a near 500 dollar gun at the time, it was what I would consider semi-finished. On the underside of the slide were tooling marks and sharp edges. The trigger was very gritty and sure enough the sear had tooling marks on it as well. It was not reliable. I had a chance to work on 2 other Colts in that timeframe (both 45s, not 10mm like the delta) and they also had issues. I know 3 guns is not enough to pass judgement and others swear by Colt pistols. To me the quality control just wasn’t there, especially for the price. I eventually went with Sig and have never been sorry.

    • Tom June 15, 2015, 3:54 pm

      I agree completely. The market drives you and you either keep up or fall to the wayside. Never put your eggs in one basket. Perhaps the remaining Colts will drop in price. Don’t own one, don’t want one.

  • Mick Dodge June 15, 2015, 7:16 am

    Did Mitt Romney slip in while Colt was sleeping and restructure everything for demolition and parting out to highest bidder ?

    • Hawk D June 15, 2015, 8:22 am

      Mick, what an A-hole thing to say.

      • D&G June 15, 2015, 9:26 am

        I guess you forgot how Mitt made his MANY million$ in the first place……..don’t shoot the messenger, especially when it is TRUE. Sorry to see Colt having issues.

        • Scott Bowers June 15, 2015, 12:50 pm

          YES! Mitt is to blame for EVERYTHING including global warming, gun control, and poor gas mileage in my truck. I’m sure Hillary will make a great 71 you old president.

          • W June 15, 2015, 4:16 pm

            hope age isn’t the crutch presidency cause Reagan sure sucked.

    • Todd June 15, 2015, 11:39 pm

      I don’t know but I’m pretty sure his voting record on the 2nd amendment is MUCH better than the last 2 democratic presidents.

  • JiminGA June 15, 2015, 6:47 am

    I can’t imagine any healthy gun maker being interested in buying Colt’s facilities in CT, a state patently opposed to guns and their manufacture. It would seem the only real assets are the brand name and the machinery.

    • Ray June 15, 2015, 8:04 am

      Colt should have relocated its facilities to a state which supports the Second Amendment a long time ago. Other companies got the hint and did so. What happened, Colt?

      • donald comfort June 15, 2015, 10:03 am

        Colt is in bed with the state and contributes lots of $$$ to the state so they may further promote their Anti Gun rhetoric.

      • Bob Tavlin June 15, 2015, 6:55 pm

        Management asleep at the wheel? Duh !

  • Cody June 15, 2015, 6:12 am

    That’s a shame one of the oldest gun makers going belly up but big banks got bailed out in 08 for crappy practices and greed somebody needs to call Obama lol.

  • Cody June 15, 2015, 6:12 am

    That’s a shame one of the oldest gun makers going belly up but big banks got bailed out in 08 for crappy practices and greed somebody needs to call Obama lol.

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