Colt just filed Bankruptcy

Before this gets closed as a drive-by, I'll just drop this here.

“Colt remains open for business,” Chief Restructuring Officer Keith Maib said in the statement. The plan will allow the company to restructure its balance sheet, he said.
Click to expand...

They aren't going anywhere.
 
Chapter 11 is Bankruptcy. But, it is not a liquidation. In a very basic sense, it gives the debtor (Colt) time and some leverage to re-negotiate its debts. However, it is not without its consequences. If the debts can't be renegotiated under a plan, there is a possibility that Colt could be fully or partially liquidated. I'm assuming that Colt will be a debtor in possession for now.

It looks like Sciens Capital Management is seeking to buy Colt's assets - probably strip out some of the debt as part of the asset sale.

Sciens Capital Management, LLC is an investment firm specializing in direct and fund of fund investments. In direct investments, the firm specializes in middle market, mature, leveraged buyouts, and turnarounds. The firm typically invests in early stage technology companies, development stage technology, and non-technology companies. It prefers to be the lead investor or control investor and seeks to take a seat or observation rights at meetings of board of directors and board committees. Sciens Capital Management, LLC was founded in 1986 and is based in New York, New York with additional offices in Athens, Greece and Ontario, Canada.
 
Last edited:
This was talked about on this forum about 3 months ago - and in listening to the analysis, there are 3 or so primary issues: Lack of demand, too many competitors and lost a big Government contract. I liken it to too much cheaper product out there. And I do mean cheaper: cost and quality.
 
Years ago the Bullseye target shooters I knew would buy a 1911 from Colt, and without even opening the box would ship it off to a gunsmith to get it to work.

Not just accurize, but to get it to load, fire, and eject. The common complaint was, right out of the box it wouldn't work.

Their designs were outdated, and REQUIRED a skilled gunsmith to assemble and get them to function.
 
Having just read the above post - I wish I would have kept my Colt Gold Cup Series 70 that I bought in the late 70s. :(
 
Until I saw .22 ammo with the Colt brand on it about 10 months ago, I had no idea the company even existed. Pretty sure it's Aguila ammo repackaged with a Colt label, near as I can tell.

"Not enough demand and too much competition..." however, doesn't even make sense--the two don't go together. I have to think it's far more along the lines of not knowing what they wanted to do when they grew up. If anyone asked me right now "what is Colt known for" I'd say "Uh, 19th century revolvers?". With the question mark.
 
Last edited:
Colt really needs a change in management if they want to be successful. They relied too heavily on military contracts to stay afloat and completely forgot about the civilian market. Sure they still make some pretty nice 1911's, and yeah they make some nice rifles (though overpriced for what you get IMO) but it's been a while since they have really come out with some new innovative products. You can only survive for so long making M4's, 1911's, and the occasional order for a Peacemaker. Adapt with the times or get left behind.
 
"Not enough demand and too much competition..."
Click to expand...

Sure it does....I see it every day in my business.

Too many restaurants on a corner - one goes belly up.

Too many hotels in a market - one or two goes back to the bank.

Colt made AR15s. And S&W made AR15s....

How many AR15 companies now out there? Or build your own parts stores?

How many make a "traditional" .45 now? etc....

Just read an article And guns sales aren't growing like they were and are still declining against the boom year of 2013....again not enough demand and a lot of competition. Cheaper competition.
 
Colt was really known for its wheel guns, 1911's and AR's. Like someone pointed out, everyone and their mother makes 1911's and AR's. S&W makes good wheel guns, but not like Colt once did. Colt's finer line of revolvers was the one thing that few companies could replicate - I guess there simply wasn't much demand for them until they decided to stop making them. Colt would have been smart to transition into making high-end semi-autos, revolvers and perhaps even long guns. Their ability to make fine guns is what set them apart from the others - they never should have dumbed it down.
 
Didn´t Colt just make a deal for $22.5mil.with the USMC for a new M45 pistol?

X-Army.....Never understood why they couldn´t fall into line with the other Armed Forces and use the M9. Colts aint cheap!
 
Didn´t Colt just make a deal for $22.5mil.with the USMC for a new M45 pistol?
Click to expand...

I know that they were all cracking during testing. This was almost 3 years ago now, and just a couple years before that the Marines bought a bunch of Beretta M9A1's to replace the standard M9, so unless someone can chime in I am not sure if they went through with the deal.
 
It looks like Sciens Capital Management is seeking to buy Colt's assets - probably strip out some of the debt as part of the asset sale.
Click to expand...

Sciens Capital Management are the owners of Colt. Sciens is responsible for the current condition of Colt. To put it bluntly, Sciens stole Colt into bankrupcy.

Over the next several years, Colt Defense went through the private equity leverage wringer. Sciens Capital and its affiliates loaded the company with debt while taking out cash in the form of “distributions” and “advisory fees.” The 2005 SEC filing shows payouts totaling $40 million over the two prior years—a significant amount for a company in such fragile financial health. In 2006, another SEC filing shows, the company redeemed “members’ equity” worth $41 million. In 2007, Colt Defense agreed to borrow $150 million in a “leveraged recapitalization” that featured distributions to “members” of $131 million.

In 2009 it borrowed an additional $250 million, while multimillion-dollar payouts continued. For 2010, Colt Defense had sales of $176 million—more than double what they were in 2004—but registered an $11 million loss. “You didn’t have to work at Colt Defense to know it had put itself in a dire situation,” says Merrick Alpert, a Connecticut businessman who began advising the shriveled remains of Colt’s Manufacturing in late 2010 and later became its senior vice president.
Click to expand...

http://www.bloomberg.com/bw/article...-owners-have-led-it-to-crisis-after-crisis#p4
 
I thought Colt was about 85% owned by Zilkha & Co, and run by Donald Zilkha. What makes you think that it is owned by Sciens Capital Management?
 
I thought Colt was about 85% owned by Zilkha & Co, and run by Donald Zilkha. What makes you think that it is owned by Sciens Capital Management?
Click to expand...

Sciens Capital owns about 87 percent of Colt.

http://www.theguardian.com/us-news/2015/jun/15/gunmaker-colt-files-bankruptcy

After the dust settled, Sciens Capital and its affiliates controlled the defence company, although Zilkha retained an ownership interest.
...
As bitter as their relationship had become, Rigas and Zilkha collaborated in 2012 on a mutually remunerative recombination of the Colt companies.
...
Contacted via email, Zilkha later said: "I resigned from the board of Colt Defense in 2006 and hold a minor interest in the business.
Click to expand...

http://www.zoominfo.com/p/Donald-Zilkha/3265956
 
Last edited:
You must log in or register to reply here.
Back
Top