In a bizarre twist to the Colt bankruptcy story, the Morongo Band of Mission Indians has stepped into give the famous gun manufacturer a helping hand. The Wall Street Journal reports:
A business-savvy tribe of Native Americans, the Morongo Band of Mission Indians, is riding to the rescue of Colt Defense LLC, the embattled gun maker caught up in a contentious bankruptcy case.
Private-equity owner Sciens Capital Management has been clashing with bondholders over control of Colt. Sciens had the upper hand, but bondholders then moved into the lead, offering to finance a turnaround via the chapter 11 proceeding that began June 14. At this point, the fate of the Connecticut company, which has roots that run back to the 19th century, is unknown.
After the initial dustups in the bankruptcy brawl, the Morongo tribe had its lawyers on the phone to everyone concerned, offering to open talks with the maker of the “gun that won the West.”
“We are the West,” said Drew Ryce, attorney for the Morongo tribe, which is based in Southern California near Palm Springs. “All we know is that the company failed and we don’t want that to happen. It’s an iconic American company. It shouldn’t fail. It shouldn’t go away.”
Colt foundered financially after losing key military contracts. Bondholders blame Sciens for letting the military contracts slip away due to alleged failure to invest to keep Colt competitive. Sciens denies mishandling the company. Colt, Sciens and a lawyer for bondholders didn’t respond to a request for comment on the interest from the Morongo.
The Morongo aren’t taking sides, said Vickie Driver, a Texas bankruptcy lawyer advising the tribe on how to find a way in to the chapter 11 action. “We’re open, ready to talk. Colt needs something to right its ship,” she said.
One of the largest tribal business conglomerates, the Morongo run a $250 million resort and casino on tribal land, as well as a golf club and travel center. The tribe also owns the Hadley Fruit Orchard stores and online businesses, it also has an alliance with Nestle Water North America which sells water bottled at a $26 million plant on the reservation. “Manufacturing in the Northeast is a very good diversification play,” Mr. Ryce said.
If it is money Colt needs, the tribe has it, Mr. Ryce said. Colt could still be put up for sale, and if it is, the Morongo will bid. Should the company choose a turnaround plan, the Morongo could step up as a chapter 11 plan “sponsor,” or outsider that funds the relaunch of a reorganized business.
If it’s an advantage in winning back U.S. government military supply contracts lost in recent years, the tribe has that, too, thanks to federal programs for Native American businesses, Mr. Ryce said.
Colt makes sense as a business investment for the Morongo. The tribe’s interest, however, is economics tinged with patriotism, according to its lawyer.
If that article reads like a film script to you, then you’re not alone. It seems that Colt’s name is deeply embedded enough in American culture for almost anything to happen in the battle to keep it alive.