Colt Defense LLC voluntarily filed petitions for Chapter 11 relief, a process the company says will accelerate the sale of its operations in U.S. and Canada.
The Connecticut-based company filed the materials in the U.S. Bankruptcy Court for the District of Delaware on Monday.
“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, U.S. government and consumer marketplaces,” said Keith Maib, Colt’s chief restructuring officer, in press materials.
“Importantly, 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,” he said.
Colt said it will continue normal business operations throughout the sale process and that it has asked the court to approve certain requests to protect trade creditors, vendors, and suppliers. If approved, Colt said the protections will allow for operations to continue uninterrupted during the Bankruptcy Court supervised sale process.
Additionally, union-related agreements will also be unaffected and employees will be paid all wages, salaries and benefits on a timely basis.
The company also said its lenders have agreed to provide $20 million to fund business operations, but the loan must be approved by the court.
The entire process is expected to be complete within 60-90 days.