Legendary US gun maker Colt Defense LLC said it filed for Chapter 11 bankruptcy protection and its current owner, Sciens Capital Management, has agreed to act as a "stalking horse" bidder.
Colt's most famous product was the Colt 0.45 six shooter, issued to US soldiers in the late 19th century and carried by Wild West outlaws including Jesse James and Billie the Kid, as well as soldiers like US General George Patton, who carried an ivory-handled, silver-plated Colt in Europe during World War II.
The company said it intended to continue normal business operations through the accelerated sale process with the help of $20m in credit facilities that its existing lenders have agreed to provide.
Sciens Capital proposed to buy all of Colt's assets and assume secured liabilities and those related to employees, customers, vendors, and trade creditors, Colt said in a statement.
Sales of Colt's modern sports rifles and handguns fell 30pc last year and cash dwindled to $11.1m by May 22, according to regulatory filings.
Colt Defense, whose M1911 was the primary sidearm for the US military for most of the last century, missed a $10.9m payment last month to holders of $250m in its senior bonds.
The current management team, led by President and CEO Dennis Veilleux, will remain in place throughout the process which is expected to be completed within 60 to 90 days, Colt said. (Bloomberg).