Colt Defense In Danger of Default

Colt Defense, LLC is apparently having trouble paying off its loans. BusinessWeek reports:

Colt Defense LLC is seeking capital to stave off an “expected default” next month as gunmakers suffer from lower defense spending and as consumers purchase fewer firearms.

The 178-year-old weapons maker said it’s “probable” it won’t comply with a loan agreement by Dec. 31 and is seeking an amendment to avoid default, according to a filing yesterday. Colt, which didn’t file its annual report on time because of accounting and liquidity issues, also said it’s uncertain it can make a $10.9 million bond interest payment Nov. 17.

Colt, whose credit rating was cut by Standard & Poor’s today to CCC-, has been struggling to service its $308 million of debt after losing U.S. contracts due to defense budget pressures and amid dissipating concern that the government will limit the ownership of firearms. Consumers rushed to buy weapons after shootings in Newtown, Connecticut, and Aurora, Colorado, fueled speculation that federal restrictions would increase.

Colt is suffering from a loss of military contracts to FN and Remington, as well as a depressing commercial market. The relevant SEC filing can be found here.

Thanks to Daniel for the tip.

Nathaniel F

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 196,800 Revolutions Per Minute, a blog devoted to modern small arms design and theory. He is also the author of the original web serial Heartblood, which is being updated and edited regularly. He can be reached via email at


  • Colt: the next addition to the Freedom Group

    • Noooooooooooooooooooooooooooooooooooooooooo!

  • Mike Guthrie

    Colt/H&K the only gun manufacturers to go broke during the biggest gun rush in history.

    • Paul Epstein

      H&K at least has the excuse it was being cut off by it’s own government (and ours) from bringing it’s most popular items to the civilian market. Colt can only blame themselves- 308 million dollars in debt? I can see taking on debt to modernize a factory or expand production, both of which should have more than paid off during the rush, but it sounds like they were so overbuilt in preparation for contracts they didn’t get, that they were going into debt just keeping the lights on.

  • Phil White TFB

    hopefully they can get a bridge loan to get them through to WWIII with Russia which will be beginning soon with the way the Zionist flunkies like Harper and Cameron treated Putin this week in Australia as Pooty Poot parked 4 Russian warships right outside Australian territorial waters.

  • greasyjohn

    Just die already. Just like Led Zeppelin or Sonic the Hedgehog, some things are better as memories.

    • Joe Smith

      Hehehehe, sooo yes.

  • HKGuns

    No-one reading this blog or with even a passing interest in firearms, should take pleasure in Colt going bankrupt.

    Probably a Chapter 11 and a move in their future. Unless they make some serious, permanent, changes it will happen again. I wonder how much they’re spending on R&D and why virtually nothing new makes it out the door other than warmed over AR’s that have different, OTS, hand guards and sights.

    • jay

      I would. They didn’t do a bloody thing worth mentioning for the last 100 years.
      Oh, I’m wrong. It’s worth mentioning that colt made history with the longest strike ever.

      • HKGuns

        It is a free Country and you’re completely within your rights to be a hating tool.

        • Zachary marrs

          He is correct

      • coltshmolt

        their double action revolvers were nice. then they quit making them. After the great rush into CAS, they brought back the single action army at a price nobody could afford.

    • No there should be no pleasure in a company going bankrupt. That’s especially true of one of the oldest gun companies with such a long history.

      • Zachary marrs

        Except this company has been forcing overpriced, and somewhat lesser quality m4’s on our military, and for their civilian sales, have failed to do anything better, or cheaper than the competition.

  • billyoblivion

    Are the same people running Colt who run the USG?

    How can you go broke selling guns in THIS climate?

    They ought to blow the dust of the tooling for the Python and Anaconda lines–at least get the nostalgia customers 🙂

  • USMC03Vet

    This may be the best thing for colt. It might result in zombie Samuel Colt returning from the grave to kick ass, take names, and get the company back to making things Americans want.

    What Would Zombie Colt Do?

    • Jay

      He would first go to town with a pair of .45s on the worthless bunch that ran the company for the last 100 years.

    • greasyjohn

      Sam Colt held the company back for years. He fired the gunsmith who developed the cartridge revolver. Smith and Wesson hired him, and it wasn’t until after Sam’s death that Colt made a competitor.

  • Seburo

    Having trouble caring if they go under You’re either the trend maker/setter, copy the other guy and try to make it better, or fail. No corporate socialism for companies who screw up.

    Looks like bid rigged government contacts couldn’t save Colt Defense. I’m also reading rumors of poor QC, bad management and overpriced guns compared to their competitors . The last the dumbest one of all. *faceplam*

    • Zachary marrs

      Ive seen a few guys at my local shop grumble about out of spec lowers and improperly staked gas keys

      • Seburo

        Screwing up A2 lowers is just baffling. Those in charge of QC have to either incompetent or negligent.

  • Jay

    Let them die already. Te last successful military firearm they designed themselves was introduced over a hundred years ago.
    They’ve been in and out of bankruptcy for the last 50 years.
    Buying generals can only get you so far.

    • Nicks87

      Hiring a General instead of a businessman to run your company is probably a bad idea as well.

      • Shayne

        Hiring a General or Business man seems to be the wrong answer in both cases. All the gun manufactories that seem to be struggling in recent years are all controlled by banker or business types. The ones that seem to be going strong are controlled by shooters.

        I also feel one the thing that is helping with the low gun demand is the cost of ammo, what is the point of buying a new firearm if you can’t afford to feed that firearm.

        • Kris Moore

          A shooter thinks, 308 million in debt is a bad thing, bankers and CEO’s think, historically low interest rates, lets sell more bonds, and pay ourselves handsomely. Which is pretty much the new normal in the American bussiness cycle. Load up on debt, and just sprinkle pixie dust on interest payments, who cares about the cost of capital of what we are going to spend it on. Works really really well for a couple folks while it lasts. Then its boom. Cronyism at its finest. Sad.

  • Blake

    I’ll buy the “loss of defense contracts”, but I have a hard time swallowing the “depressed consumer interest” line when companies like Ruger have to stop taking new orders in order to catch up on production backlog.

    Sounds more like “we bet the farm on defense contracts & didn’t bother marketing to consumers”. I know plenty of people that own ARs, but none of them is a Colt (or even has a Colt upper or lower).

    • Ruger stopped taking orders briefly during the peak of the last buying craze. They have been taking orders again for a long time now. The market has largely returned to normal levels, and the AR market has been depressed.

  • joe schemo

    They have only themselves to blame.

  • Mr.T

    To many ‘retired’ Generals on the board in the past , things ran well only till army switched to FN that was by the way half price.

  • Mr.T

    Maybe Chinese can now buy the brand for pennies and start selling the Colt branded norincos by the shipload.

  • aweds1

    Is Colt Defense a separate entity from the part of Colt that makes civilian firearms? Would it make a difference to the civilian market if Colt Defense defaulted?

    • Mack

      I was wondering the same thing! does anybody know if they are separate?

      • The companies used to be separate, but rejoined again recently through some highly leveraged accounting.

  • dp

    Colt? Is it not cold already? Internationalize it, like any other company. Offshore it.

  • Jay2

    The only Colt I’d buy is a Diemaco.

  • Joe

    Chalk it up to poor management and too much love for government teet juice.

  • Lance

    Well Colts over price on both Government contracts and Civilian market has made it pay its price. Face it Both FN and Remington making far cheaper M-4s and M-16s for the military and Bushmaster Olympic and 150 other AR makers are far cheaper and less pro liberal scum PC compliant than Colts weapons are.

    I agree will Freedom group buy Colt soon???? Well see!

    PS both HK and SIG are not doing much better these days.

  • SineNomine

    Maybe the fact that other manufacturers make firearms that are just as good for half the price has something to do with it. Colt charges way too much of a premium for its label, IMHO.

  • Secundius

    Well, I guess the same thing is going to happen with Colt. That did happen to Taurus, or might happen Heckler & Koch USA and Sig Sauer USA. How much salary reductions are the Member of the Executive Board going to give up…


    Colt will come out of this smelling like a rose ! @Jay,you’re nothing but a yankee,..’already’

  • kingghidorah

    Dear Colt,
    People will buy a Colt just because it’s a Colt. People buy your really shitty knives just because they have your logo on them. Your last new pistol attempt was a dismal ‘All American’ failure. That pistol made even the Sigma look fantastic. What Colt really needs is a sub $500 ‘M&P’- with features not on a Glock- like a ‘second strike’ capability like a Taurus PT111, Make it here, unlike XD and CZ, and make it sexy as hell- unlike all of them, and watch the $ roll in. If I were in charge, I’d quietly copy, refine (PT111 trigger system) and pretty up the Arsenal Strizh- and it would definitely have to take Glock mags. I’d buy one. Or copy a Sig, they have no shame in copying your stuff lol. Hell, you wouldn’t even have to take out an ad, the market will gush all over your new gun, because YOU’RE COLT!
    Face facts, the AR market is beyond flooded. Last gunshow I went to the tables are LOADED with them, the attendees are walking around with them, and NO ONE was buying- even at the fire sale prices as the sub $400 AR is now a reality. Good luck, and you’re welcome.

  • Chuang Shyue Chou

    Would Colt not have a lot of patents and other intellectual properties that it can rely on?

    • Zachary marrs

      The only thing colt had was the m4 tdp, which has already been put into circulation (at least for a bit) along with the m16a2 tdp, witch share about 80% of the same parts with the m4

      So to answer your question, no, colt has nothing

      • Chuang Shyue Chou

        Then, it would render it rather unattractive for potential investors. I don’t believe that Colt will sink despite the lack of intellectual properties. The facilities are there. As observed earlier, it is really not the first time that Colt has filed for bankruptcy, Colt will get new investors who will pump in new funds. Colt will be around for years to come. I can’t see it dismantled and auctioned.

        It is going to be business as usual after another round of re-structuring.

  • Chuang Shyue Chou

    It is not the first time Colt has filed for bankruptcy, they will simply restructure and get a new dose of funding and new owners. Colt will still be around. No question about that. It is too big to fail.

  • Mazryonh

    Assuming Colt goes under (and by the impression I’ve seen from this blog, it’s looking that way due to how it hasn’t really bothered to cater very much to the civilian market lately), who would take their place and/or buy them out?

    • Zachary marrs

      There are hundreds of companies that are making much better ar15’s than colt

      Places like bcm, noveske, LaRue, spikes tactical, Daniel defense, aero precision, fn, kac, and dozens of others

  • dannye

    Oh look, a company entirely dependent on government contracts goes under. Good riddance.

  • onthedew

    They have secured new financing…..

  • Shayne

    Until ammo prices return to pre-2008 it is a valid point. 2008 guns went up and ammo followed (people wanted to shot those new guns they bought). Here in Clarksville TN finding certain .223 or 9 mm in stock is a time to celebrate. They have all kinds of the over $0.60 a round stuff but none of the cheap ammo that people kept telling me about.