Colt in Trouble

[Hound]

This gives a bit more info from a purely economic viewpoint. Yes, this is Bloomburg (but the trading platform) and yes I am aware that might as well be synonymous with Satan around here but he does not have anything to do with the writing when it comes to this level. I have no reason to not belive this is true. For those of you going for laissez-faire economics (which by the way is French)........ so since these guys bought Colt and basically sucked it dry........ You would be good if a Billionaire like Bloomburg simply went out, bought all of the major gun manufactures (and probably ammo resources like Hodgdon) through dummy corporations and then one day just shut them all down? Guess that means he will win eventually. To be clear: I am not saying to-big/old-to-fail but this seems like an easy and cheap way for that assclown to win.

The gun company founded by Samuel Colt has flirted with financial disaster for much of its 179-year history. Now the storied West Hartford (Conn.) maker of rifles and pistols is heading into Chapter 11, in large part because of more than a decade of dubious financial engineering and accumulating debt.

Colt Defense, as the main part of the company is now known, filed for bankruptcy protection on Sunday while listing as much as $500 million in debt. Cooling demand for its civilian semiautomatic rifles and handguns, as well as delays in certain large U.S. government and foreign military orders, have exacerbated the company's finances. But the main reason the company hasn't weathered rocky market conditions since the winding down of the wars in Iraq and Afghanistan is that the New York financiers who control the company borrowed too much and paid themselves lavishly.
As I reported in a feature story last year, the private equity firm Sciens Capital and its affiliates loaded Colt with debt since the mid-2000s while taking cash out in the form of "distributions" and "advisory fees." Sciens remains the controlling owner of Colt Defense, according to a regulatory filing. An executive with Sciens did not immediately return a message seeking comment.
In 2009 and 2010, meanwhile, Colt somehow missed out on the "Obama surge," a run of strong civilian gun sales prompted by fears whipped up by the National Rifle Association that the Democratic president would stiffen federal gun control. The panic-based buying that lifted the small arms industry has now eased, making it even more difficult for Colt to move the military-style semiautomatic rifles it had hoped would be its salvation. "The industry's recent rapid growth is expected to slow over the next five years, increasing at a more modest average annual rate of 4.1 percent," according to the research firm Ibisworld.
Here's how Bloomberg News is reporting on the bankruptcy protection filing:

Colt’s current sponsor Sciens Capital Management LLC has agreed to act as a stalking horse bidder for all of its assets and liabilities related to existing agreements, according to a statement from the gunmaker. Existing secured lenders have agreed, subject to court approval, to provide a $20 million debtor-in-possession credit facility, Colt said. The current management team will remain in place.
“Colt remains open for business,” Chief Restructuring Officer Keith Maib said in the statement.

Open for business, perhaps, but vulnerable now to being sold off in pieces with little remaining behind the brand associated with such iconic firearms as the 1873 Single Action Army, known as "the gun that won the West," and the Colt 1911, the official sidearm of U.S. Army soldiers from WWI through Vietnam.