West Hartford Gun Maker Colt Files for Bankruptcy

West Hartford’s Colt Defense filed for Chapter 11 bankruptcy protection late Sunday night, which the company said will allow for an accelerated sale of Colt’s business operations in the U.S. and Canada.

In its filing, the company said it could emerge from bankruptcy within 60-90 days. However, it warns that if this option is not accepted by the U.S. Bankruptcy Court in Delaware, “the only other alternative is a chapter 7 liquidation” of the 179-year-old company, according to the Hartford Courant.

Colt Defense employs 610 people in West Hartford, according to the Courant.

Colt announced on Sunday night that 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.

According to a press release, 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 through a long term extension on the lease for its manufacturing facilities and campus in West Hartford.

Colt 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, according to the release.

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.

“Colt remains open for business and our team will continue to be sharply focused on delivering for our customers and being a good commercial partner to our vendors and suppliers,” Chief Restructuring Officer Keith Maib said in a statement. “We look forward to successfully executing on this plan, which provides a sound path of stewardship for an iconic American brand and the key stakeholders we serve.”

Read more from the press release below:

Colt’s existing secured lenders have also agreed to provide, subject to approval of the Bankruptcy Court, $20 million in debtor in possession credit facilities to allow for continuation of operations in the ordinary course of business during the Chapter 11 process. The entire process is expected to be complete within 60-90 days.

On June 12, 2015, Colt’s previously announced exchange offer, consent solicitation and solicitation of acceptances of a prepackaged plan of reorganization with respect to its 8.75% Senior Notes due 2017 expired. The conditions to the exchange offer, the consent solicitation and the prepackaged plan of reorganization were not satisfied and such conditions were not waived by Colt. All 8.75% Senior Notes due 2017 of Colt tendered and not validly withdrawn pursuant to such exchange offer will be returned promptly to the tendered holder thereof in accordance with the Offer to Exchange, Consent Solicitation Statement, and Disclosure Statement Soliciting Acceptances of a Prepackaged Plan of Reorganization, dated April 14, 2015, as supplemented, and applicable law.

Perella Weinberg Partners L.P. is acting as financial advisor of the Company, Mackinac Partners LLC is acting as restructuring advisor of the Company and O’Melveny & Myers LLP is the Company’s legal counsel.