One of the U.S. military's top firearms manufacturers has Colt Defense LLC, the military-oriented branch of the firearms manufacturer that pioneered rifles including the venerable M16, the M4 carbine and today produces pistols for the Marine Corps, filed for Chapter 11 bankruptcy Sunday.
Colt Defense LLC, the military-oriented branch of the firearms producer, filed for bankruptcy reorganization on Sunday. The company produces the Army and Marines' M16 and M4 rifles, as well as specialty pistols for the Corps.
Colt officials say the filing should have The move should have not impact effect on U.S. military purchases, however, since the company has secured funds to continue operating while it reorganizes its finances, according to company representatives say.
"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, Colt Defense's chief restructuring officer of Colt Defense, said in a statement.
Colt currently produces pistols for the U.S. military, including namely the Marine Corps' M45 Close Quarters Battle Pistol. The M45 CQBP is aA tuned M1911 patter pistol, the M45 is popular with elite forces like critical skills operators with Marine Corps Forces Special Operations Command. Colt won a $22.5 million contract in the summer of 2012 to produce up to 4,000 thousand for delivery by 2017.
Jim Katzaman, a spokesman for Marine Corps Systems Command, said all of the Colt M45 pistols have now been delivered.
"The Colt Defense action is not an issue for the Marine Corps," he said.
Army officials did not respond to similar questions about how Colt's bankruptcy could impact contracts for soldiers' weapons by press time.
Colt officials said they hope the move in filing at a U.S. Bankruptcy Court in Delaware at in making the filing in U.S. Bankruptcy Court in Delaware, it hopes the process will allow it to quickly sell its business operations in the U.S and Canada. A firm, Sciens Capital Management, plans to buy virtually all of Colt's assets. The What is more, the company has also secured about $20 million from its primary lenders to continue operating while in manufacturing during bankruptcy, The Wall Street Journal reported.
The bankruptcy also won't eaffect the Army's procurement of the M4A1 since Colt Defense — the weapon's original designer — lost a $77 million contract for M4 and M4A1 carbines in 2013 when it was outbid by FN Manufacturing. The U.S. subsidiary of FN Herstal, a Belgian company, was tapped to produce 120,000 next-gen M4s, which have a heavier barrel and better triggers among other improvements.
FN Manufacturing also outbid Remington Arms Company after two contract protests by Colt that included a dispute over the royalties the Army would owe for allowing others to produce the Colt-owned design.
Colt Defense, however, was tapped in March 2014 — as part of a $54 million joint contract — to provide the Army with heavier barrels that would be used as part of a broader package of components to convert M4s into M4A1s. The estimated date of completion is was in early 2018.
Colt officials continue to voice optimism for the future of the company. The bankruptcy Sunday filing should speed sale of the company without all the debt that otherwise would have been associated with it, which That will keep the company above water and means it could remain a contender for future U.S. military contracts. The company has gone through previous is wouldn't be the first bankruptcy filings, the company has survived including one in 1994.
USA Today contributed to this report.
