Colt Defense LLC filed for Chapter 11 bankruptcy protection Sunday, warning that its business is in a fragile state and needs a quick sale to survive.
The bankruptcy filing was expected for the famed gun maker, which failed to win the support of bondholders for a debt-reshaping agreement. Colt had said if it couldn’t reach a deal, it would put itself up for sale in bankruptcy.
Papers filed in the U.S. Bankruptcy Court in Wilmington, Del., estimate the company’s debts and assets are both in the $100 million to $500 million range. Liabilities include more than $100 million in top-ranking secured debt and the $250 million bond debt.
In court papers, Colt said it can’t afford a long court fight with bondholders, and could have to liquidate if the Chapter 11 proceeding becomes a long, litigious bankruptcy.
According to the company, the “present situation concerning customer confidence and its ability to meet current customer demands for finished rifles and handguns is fragile.”
