Colt Defense LLC the iconic gun maker based in Connecticut filed late Sunday for chapter 11 bankruptcy protection, allowing for the quicker sale of its operation in Canada and the U.S.
In the filing, the company estimated its assets as well as liabilities to be between $100 million and $500 million.
The company said it was able to secure financing in the amount of $20 million from its lenders and will continue its operations while under bankruptcy protection.
In a corporate statement, Colt announced that it could reassure employees of its complete commitment to continuing operations through a long-term lease extension at its headquarters and manufacturing facilities.
Union related agreements would also go on unaffected and Colt employees would be paid full wages benefits and salaries on a timely basis.
The current members of management, which is led by Dennis Veilleux the CEO and President since October of 2013, will remain throughout the restructuring process.
Samuel Colt founded the company in 1855 and its revolvers that were produced helped to propel the firearms industry away from the single-shot firearms. More recently, the company supplied the U.S. military with is M4 carbine. The Colt M1911 was the primary U.S. military sidearm for much of the past century.
The recent past of Colt has been somewhat checkered. It has gone through one chapter 11, emerging in 1994. It was also reported by an national newspaper that Sciens was 87% owner of the company with certain principals indirectly owning shares in the manufacturing facilities.
Sales of the modern handguns and rifles made by Colt dropped 30% in 2014 and its cash was dwindled down to only $11.1 million in late May.
The company missed a payment of $10.9 million in May to holders of its senior bonds of $250 million.
