From: breitbart.com, by AWR Hawkins, on June 15, 2015, see the article HERE.
On Sunday, Colt Defense LLC announced it is filing for Chapter 11 Bankruptcy protection and looking to sell operations, or portions of operations, in the U.S. and Canada to pay off $355 million in debts.
In November 2014 Breitbart News reported that Colt was then in trouble and could face default by year’s end. They made it through the year, but would not give any comment on their finances when approached by Breitbart News at the 2015 SHOT Show in Las Vegas.
According to The Wall Street Journal, Colt barely survived last year by “[borrowing] $70 million from Morgan Stanley… to pay interest on its bonds, and in February it warned it might not have enough cash to make an interest payment by a June 15, 2015, deadline.”
Colt has faced opposition from its bond holders who do not want to agree to any deals that “slash the amount of money” the gun maker owes them.
Colt began making firearms in the 19th century and boasts two of the most iconic guns of American history: the Colt revolver and the Colt 1911. The company also made a strong name for itself with the M4 — a fully automatic military rifle on the AR-15 platform.
In 2013, Colt lost the contract to supply the Army with the M4.
Those looking from the outside in have speculated that Colt depended on its military contracts and failed to keep up with the times regarding the civilian market.
For example, CNN Money notes that the burgeoning popularity of concealed carry has made “compact and light handguns” the craze in America. But Colt has not exactly been the tip of the spear for compact and light. Instead, they have watched concealed carriers move to Glock and other manufacturers.
As a result, Colt’s de jure loss of military contracts was compounded by a de facto loss of civilian interest.
I think that I qualify as an avid gun nut, but I’ve never owned a Colt of any flavor. Through the years, I’ve owned one or more of all of the household names in firearms, but never a Colt. That wasn’t by design, I had nothing against Colt, in fact they had an esteemed name in the history of American firearms. As it turned out, they just never had anything that fit my needs in the way of platform and/or price range. I guess that’s evidence that they didn’t appreciate the emerging markets for reasonably priced home defense, sporting, or concealed carry guns – and apparently, it bit them in the ass.
I would hate to see the iconic Colt name disappear from the scene and in fact, I’ve been considering one of the new smaller compact 9mm as another choice for everyday carry, but they just don’t have a dog in the hunt. The fault is with their management. They apparently thought that their military products would live forever and when they lost the M4 Army contract, they didn’t have a plan B. I hope that they can reorganize or sell to someone who will keep the Colt brand alive, there’s so much history associated with it, I’d hate to see it disappear.