Colt filing for chapter 11

Chapter 11 is not necessarily the end of the road. Basically, it provides an automatic stay, meaning creditors have to hold off on collection action pending further court action. (Usually 45 days.) Meanwhile, a trustee is appointed to oversee and report conditions to the court. The centerpiece is the development of a plan for the repayment of creditors, which has to be accomplished in around five years. If the debtor fails to comply with the plan, the case could be converted to a straight bankruptcy (liquidation), where the assets would be either liquidated or otherwise distributed to creditors in order of priority (secured creditors do better than unsecured creditors, for example.

My take ? Probably the biggest asset Colt (the entity has been reorganized and spun off a number of times) has is the intellectual property, like trademarks, surviving patents and the like, and maybe some of the tooling. Last I knew, the physical assets were pretty much toast and antiquated. Possibly, going through bankruptcy could result in a better, stronger Colt down the line, by freeing the IP assets from the old physical assets. Time will tell. Heck, even Sam Colt went through bankruptcy at least once !

Short term ? Prices will probably go up. Good time to dump a Colt if you are thinning things out. I guess the thing I'd watch for is parts, again, in the short run. If you've got a project, or just a well-worn Colt, you might want to consider picking up parts now. (Disclaimer-I don't practice bankruptcy with any regularity.)

I heard this on the radio today. One of our local, Pro 2 A, Senators remarked, that colt has been being hounded quite a bit by BATFE. He said he likes to refer to them as the "Bureau of All Things Fun & Exciting". Its good to have a pro gun senator have the stones to say something like that!