Shooting Sports Retailer has learned that Colt Defense LLC has obtained approval from a judge for its plan to emerge from bankruptcy, with officials saying the company will be out of the woods by the end of the year.
In June the company announced it could not make payments on its $250 million debt to creditors and was forced to seek Chapter 11 protection after several lenders balked at a plan to cut their returns.
While rumors swirled over what would happen to the iconic brand, Colt officials spent several months devising a plan to stay in business and keep its products intact.
“The plan will significantly restructure and reduce the company’s debt, improve its capital structure and enhance its liquidity profile,” Colt said in a statement sent to Shooting Sports Retailer. “The Company will also have a new lease for its West Hartford [Connecticut] facility and the plan reaffirms the company’s strong relationship with the UAW.”
Part of the delay in approving Colt’s restructuring plan was tied to its lease at its manufacturing facility in Connecticut and its long-term liabilities to its union workers.
“Today we achieved the last important milestone on Colt’s path to emerging from Chapter 11 as a stronger and more competitive company,” said Dennis Veilleux, President and Chief Executive Officer of Colt Defense LLC. “We greatly appreciate the dedication and support of our extraordinary employees during this process, as well as the support we received from our financial stakeholders, Sciens Capital and our customers and vendors.”
Sources tell Shooting Sports Retailer the company is set to release several new products next year, though it is unclear if Colt will satisfy critics who say the company’s demise is tied closely to lack of innovation.