In a recent article on Guns.com shows an outlined plan for Colt Defense to get itself out of the current financial quagmire that it finds itself in these days. And no, it doesn’t involve a Native American Casino company as was proposed earlier this year in an attempt to save the company. The current plan is to completely restructure the financial landscape of the company in addition to consolidating debt, both of which I have neither the financial education or knowledge to explain in eloquent terms. The important part is that the plan was approved by a federal judge, but still has to be voted on by the stock holders. However I think the most important part is that it doesn’t include firing any of the 700 employees that Colt currently employs, always a good thing for the job market. Personally I feel that Colt has more often than not, been a reactive firearms company as opposed to the more proactive firearms companies in coming out with new designs and adapting to the market. By this I’m referring to such companies as Winchester, Remington, Ruger, and other large companies that have constantly changed their designs and introduced new ones. Whereas Colt has largely depended on their government contracts and their production of previous successful designs to keep them afloat. In addition to all Colt AR parts being Mil Spec to begin with, because they are the original. We reported on this plan in September this year, but the difference now is that the plan was approved by a judge.
A federal court approved a plan by iconic gun maker Colt Defense this week to lead the company out of bankruptcy, but details are not set in stone as debtors still need to vote.
The painstakingly detailed plan is a result of “extensive and vigorous negotiations” that have been ongoing since Colt filed for Chapter 11 protections in June, according to Tuesday’s filing with the U.S. Bankruptcy Court in Delaware.
Colt said the plan reflects a consensus reached by key stakeholders that include the equity firm that owns it, Scens Capital Management, and secured lenders, Morgan Stanley, an official committee of unsecured creditors, and the landlord of Colt’s facility in West Hartford, Connecticut.
The plan will solidify options for Colt to manage financial obligations. Also, the hopes are debtors will be able to successfully restructure the $250 million senior notes claims, and ensure operations continue at the company’s West Hartford facility while preserving the more than 700 employees.
Participants have until the voting deadline on Dec. 7 at 4 p.m. eastern to cast their ballots. If votes are favorable, Colt said it should be out of bankruptcy by the end of the year.