Colt Says It Is Close to Deal To End Bankruptcy

Nathaniel F
by Nathaniel F

According to a recent article by business news outlet Reuters, Colt Defense may be close to a deal to bring the company through its ongoing bankruptcy. The success of this plan is critical to the survival of Colt in its current financial hands, as the alternative is that the company will be sold off. From Reuters:

WILMINGTON, Del (Reuters) – Gun maker Colt Defense and its creditors are close to a deal on a plan to bring the company out of bankruptcy, but if it fails, the business will go on the auction block next month, a company lawyer told a judge on Thursday.

Colt filed for bankruptcy earlier this year due to falling sales of its sport rifles and the loss of military contracts. The company’s private equity owner has been battling its bondholders for control of the West Hartford, Connecticut-based business, and the parties are pressured by Colt’s dwindling cash.

“It’s fair to say the parties are very close to a deal,” Colt lawyer John Rapisardi told the U.S. Bankruptcy Court in Wilmington, Delaware. “The parties are working to finalize a term sheet and an agreement can be reached in a couple days.”

Colt wanted more time for talks but was forced to court by Morgan Stanley, which is using its bankruptcy loan to demand the start of a court-supervised auction process.

Judge Laurie Silverstein paused the hearing and sent the parties into a conference room to work out an agreement. The parties agreed to auction procedures, but postponed by three weeks the deadline for bids and a sale. An auction would be held on Oct. 20.

Colt filed for bankruptcy in June with a plan to sell the company to its private equity owner, Sciens Capital Management, in return for some of Colt’s debt. Under that plan, which was abandoned, holders of the company’s $250 million in bonds would have received nothing.

Bondholders have proposed their own plan, which includes eliminating a large portion of their debt in return for control of the company.

A Sciens affiliate has an interest in the Colt lease, which expires in November, and creditors have alleged the private equity firm is using that lease to discourage possible bidders and unfairly increase its leverage in the case.

We’ve covered Colt’s financial woes extensively. You can read previous articles regarding Colt here, here, here, here, and here.

Nathaniel F
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. He can be reached via email at

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4 of 48 comments
  • Tazman66gt Tazman66gt on Sep 05, 2015

    The same ones complaining about Colt's product range would be the same ones complaining if they came out with a polymer striker fired firearm saying they lack creativity.

    • See 1 previous
    • Spencerhut Spencerhut on Sep 06, 2015

      @tazman66gt You're probably right. But I'd like to think if Colt was a little more reasonable on the prices, that is they stop using high prices to try and fix their bad financial decisions they would be selling more. More people, including me would buy Colt branded Series 70 guns with modern features if the prices were comparable to say Springfield. But why would someone want a current production Delta Elite with it's 1980's design features at the silly price they sell them? $1100 for a poorly fit retro Delta or $1350 for a perfectly fit completely modern Dan Wesson 10mm?
      Colt is doomed if they don't seriously rethink the product line.

  • Sulaco Sulaco on Sep 06, 2015

    Colt lost me when they did the bait and switch with the Colt Magnum Carry snub revolvers. And that was a long time ago when they were in much better shape.