Disclaimer: I don’t really speak financialese, and therefore would urge readers to double-check anything I’ve written on the subject. Don’t be afraid to correct me in the comments, either!
Daniel Watters, the inimitable author of The 5.56 Timeline, has been closely following the recent Colt financial struggle, and also being an avid patent hound, discovered an interesting inconsistency in some of that company’s patents. Hognose of WeaponsMan.com has a more extensive writeup:
In the long-running serial of financial peril that is the Colt Defense story, a midnight discovery by commenter Daniel E. Watters:
I just happened to take a look at one of Colt’s patents and noticed that it has been assigned to Cortland Capital, the folks who bailed them out in February. Further research shows that this is true across the board for the active patents and patent applications.https://www.google.com/search?tbm=pts&hl=en&q=%22CORTLAND+CAPITAL%22#hl=en&tbs=sbd:1&tbm=pts&q=%22CORTLAND+CAPITAL%22+colt
Daniel is best known for his indispensable 5.56 timeline at the Gun Zone, but he has been a persistent researcher of the Colt financial drama. In this case, he is right on. Colt’s patents are gone, they technically are no longer property of Colt Defense LLC; and they won’t be, unless Colt repays the loan. And this is nothing new: since 2006 Colt has been mortgaging
We’re not referring, of course, to Colt’s historic patents, like this 1836 revolver patent, which have long since lapsed.
We’re talking about its current patents, like this frequently-cited 2005 modular firearm patent. As that link shows, it, and its brethren, have at one time or another been the property of a who’s who of New York banking interests: Bank of America, Wells Fargo, JP Morgan Chase. And in recent years, less-established banks, the sort that make riskier loans, culminating a couple of years ago with Cortland Capital, whose latest loan of $33M came with a 10% interest tab.
That Colt has been using its inventions as collateral for loans is interesting in and of itself, but Daniel’s information doesn’t stop there. Colt has also secured a contract for foreign-military M4 Carbines worth $36 million US:
Colt Defense LLC, West Hartford, Connecticut, was awarded a $36,104,812 firm-fixed-price, indefinite-delivery/indefinite-quantity foreign military sales contract (Jordan, Antigua and Barbuda, Belize, Colombia, Hungary, Oman, Panama, Romania, Senegal, Lebanon, Romania) for M4/M4A1 carbines. Funding and work location will be determined with each order with an estimated completion date of May 21, 2018. Bids were solicited via the Internet with one received. Army Contracting Command, Warren, Michigan, is the contracting activity (W56HZV-15-D-0038).
We at TFB will keep our readers updated on the situation with Colt Defense.