by Joseph P. Tartaro | Executive Editor
Colt Defense LLC announced on June 14 that it had voluntarily filed a Chapter 11 petition in the US Bankruptcy Court for the District of Delaware, a process that should allow for an accelerated sale of Colt’s business operations in the US and Canada.
Colt’s current sponsor, Sciens Capital Management LLC, has agreed to act as a “stalking horse bidder” and has proposed to purchase substantially all of Colt’s assets and assume secured liabilities and all liabilities related to existing agreements with employees, customers, vendors, and trade creditors.
Colt’s announcement said that the company intends for the sale to ensure a smooth and swift transition of the business with all of its “iconic brands, products, and operations” supported by a stronger balance sheet due to a significantly lower debt burden.
As part of the Sciens led bid, Colt will be able to reassure its employees and local community of its commitment to continued operations in West Hartford, CT, through a long term extension on the lease for its manufacturing facilities and campus there. In accordance with the sale process under section 363 of the Bankruptcy Code, notice of the pending sale to Sciens will be given to third parties and competing bids will be solicited, with an independent committee of Colt’s board of managers established to manage the bidding process and evaluate bids.
Colt said it intends to continue its normal business operations throughout the accelerated sale process and has asked the Bankruptcy Court to approve certain company requests to protect trade creditors, vendors, and suppliers, thereby allowing for its operations to continue uninterrupted during the Bankruptcy Court supervised sale process. Union-related agreements will also be unaffected and employees will be paid all wages, salaries and benefits on a timely basis.
The current management team, which has been led since October 2013 by President and CEO Dennis Veilleux, will remain in place throughout the process.
“The plan we are announcing and have filed today will allow Colt to restructure its balance sheet while meeting all of its obligations to customers, vendors, suppliers and employees and providing for maximum continuity in the company’s current and future business operations,” said Keith Maib, Chief Restructuring Officer of Colt Defense LLC. “While entering Chapter 11 protection in the absence of a consensual agreement with our noteholders was not our preference and we do not take it lightly, we are confident it is the best path going forward and will enable us to continue to gain traction on a challenging but achievable turnaround in our business performance and competitive positioning in the international, US government and consumer marketplaces.”
“Colt remains open for business,” Maib stressed.
Colt Defense has enjoyed success for much of the past century, thanks in part to lucrative contracts with the US military, in which Colt was the primary manufacturer of the weapons used by frontline troops. Some sources reported that Colt’s military contract ended in 2013 and, combined with some supply troubles and a slowdown in sales, business began to flounder. Colt missed a $10.9 million bond payment in May, much to the chagrin of holders carrying $250 million in the company’s senior bonds.
However, the slowdown in sales, particularly in the consumer market, has been ongoing for years. Additionally, in the past 40 or so years, Colt has shown a remarkable inability to create truly new products or make the most of the product lines for which it was once famous.
Several years ago, Colt sponsored several luncheons for gun writers and firearms experts during a SHOT show, but company production executives immediately scotched almost every recommendation that was offered, and what new products did appear were all variations on the M16/15 platform or 1911 pistol. Meanwhile, many existing or newly established companies with greater imagination were growing in a vastly expanded firearms marketplace.
Ruger LC380 pistol back in California
Sturm, Ruger reported recently that it has reintroduced the Ruger® LC380® pistol to California.
The LC380 was originally introduced nationwide in 2013 as a low-recoiling and easy-to-rack variant of the Ruger LC9® pistol.
In 2014, Ruger made some minor changes to the LC380 production processes that would have required the pistol to meet California’s controversial microstamping law. However, the LC380CA™ California-compliant model reflects the unmodified pistol as originally approved by California in 2013.
As a special “bonus” with this reintroduction, the LC380CA will ship for a limited time with a LaserMax® CenterFire® frame mounted red laser.
Kalashnikov USA, CAA relocate to South Florida
Kalashnikov USA, manufacturer of Kalashnikov style firearms, has announced the company will relocate to South Florida.
The new facility will include corporate offices and allow for manufacturing, warehousing and shipping functions to occur in one location. The move, which will take place over the next several months, will not affect the projected 2015 second quarter shipping of the new Kalashnikov USA firearms.
“With the growth of the company, manufacturing requirements and the rebranding efforts now underway, Kalashnikov USA felt the time was right to move the headquarters where we can incorporate our new manufacturing capabilities,” Thomas McCrossin, CEO of Kalashnikov USA said.
“Our new facility in South Florida offers the opportunity to expand as we grow while offering customers increased customer support and firearms produced using the latest manufacturing technologies and materials.”
The new US132 modern rifle and US109 tactical shotgun were reported to be on target to be released by early summer incorporating the new Kalashnikov USA slogan “Russian Heritage / American Innovation.”
At the same time, CAA USA, a related company, will also move to South Florida. CAA, also known as Command Arms Accessories, markets and distributes branded accessories for the AR / AK platforms, the RONI® pistol-carbine conversion, as well as less-lethal products, such as the newly released Lady Jean Pepper Spray. The product line includes advanced light and laser devices, bipods, handgrips, Picatinny rail systems, tubes, butt stocks, cheek rests, non-lethal personal protection and the patented RONI® pistol-carbine conversion. www.commandarms.com
FNH donates pistols to Scout’s Marksmen
FNH USA has donated 15 FNS™ striker-fired pistols to the Boy Scouts of America’s (BSA) Marksman program, an in-depth program dedicated to marksmanship fundamentals, safety and skill development, hosted at the Summit Bechtel Reserve, a national Scouting center in Glen Jean, WV, focused on changing young people’s lives through training, education, leadership and high adventure.
Scouts and Venturers attending the Marksman program this summer will have the opportunity to learn the basics of pistol shooting with the striker-fired FNS™-9 Standard and the brand-new FNS™-9 Compact, both chambered in 9mm.
Bass Pro Shops honored as employer
Bass Pro Shops has been named one of “America’s Best Employers” by Forbes magazine for its excellence as an employee-focused company.
Forbes determined the best employers through an independent survey of 20,000 employees at companies with at least 2,500 people. Employees from about 3,700 companies responded to the survey. Participation in the survey was voluntary. Respondents were asked anonymously through several online panels if they’d recommend their employer, or any other employers in their industry, to a potential employee.
