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Colt Defense Files Plan of Reorganization and Disclosure Statement

October 12, 2015, 07:46 AM
Filed Under: Bankruptcy

Colt Defense LLC has taken a significant step toward completion of its restructuring and exit from chapter 11 by filing a plan of reorganization (the “Plan”) and a disclosure statement with the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

The Plan and disclosure statement are consistent with the terms of a restructuring support agreement among Colt, holders of over 60% of Colt’s outstanding 8.75% Senior Notes due 2017 (the “Supporting Noteholders”), Sciens Capital, and the landlord under the lease for the Company’s West Hartford, Connecticut manufacturing facility and corporate headquarters. Under the Plan, Colt will receive $50 million in new capital from certain of the Supporting Noteholders and Sciens Capital, which will allow the Company to execute its business plan and emerge from chapter 11. The Plan secures options for the Company to continue operations in West Hartford, Connecticut on a long-term basis. The Plan and disclosure statement also include the terms on which the Company’s secured lenders, including Morgan Stanley Senior Funding, Inc., have agreed to refinance their prepetition and post-petition loans through new secured exit facilities to be issued on the Plan effective date.

The Plan is subject to the vote of the Company’s creditors and the review and approval of the Bankruptcy Court. Colt has filed a motion with the Bankruptcy Court seeking approval of the adequacy of the information contained in the disclosure statement so that it may seek confirmation of the Plan consistent with the milestones contained in its DIP credit agreements. The Company’s goal is to emerge from its chapter 11 restructuring before year end.

“We are encouraged by the progress we have made toward a successful exit from bankruptcy, and are confident that our filed plan of reorganization strengthens the Company’s balance sheet, provides adequate capital and liquidity to execute our strategic plan and preserves continuity in Colt’s business operations,” said Dennis Veilleux, Chief Executive Officer of Colt.

“As we work diligently to seek approval of the Plan by the Company’s creditors and the Bankruptcy Court, today’s announcement reflects broad support for our Plan among Colt’s key stakeholders and positions the Company with a path forward to emerge from Chapter 11 as quickly as possible. Importantly, as this process moves ahead, the operational financing we had previously secured remains in place, enabling us to continue to meet our obligations to customers, suppliers, employees and other key service providers,” Veilleux continued.

“Today’s announcement is a testament to the dedication and professionalism of our people, and our senior lenders, specifically the Supporting Noteholders and Morgan Stanley, who are committed to supporting Colt’s success as an iconic American manufacturer,” Veilleux concluded.

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.

Willkie Farr & Gallagher LLP is legal counsel to Morgan Stanley Senior Funding, Inc., GLC Advisors & Co., LLC is acting as financial advisor to the Supporting Noteholders, Brown Rudnick LLP is legal counsel to the Supporting Noteholders and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel to Sciens Capital.

Colt is one of the world’s leading designers, developers and manufacturers of firearms. The company has supplied civilian, military and law enforcement customers in the United States and throughout the world for more than 175 years. Our subsidiary, Colt Canada Corporation, is the Canadian government’s Center of Excellence for small arms and is the Canadian military’s sole supplier of the C7 rifle and C8 carbine. Colt operates its manufacturing facilities in West Hartford, Connecticut and Kitchener, Ontario.

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