Colt Defense Files Plan of Reorganization and Disclosure Statement
October 09 2015 - 10:41PM
Business Wire
Colt Defense LLC (“Colt” and the “Company”) announced today that
it 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.
For access to documents filed in the United States Bankruptcy
Court for the District of Delaware and other general information
about these Chapter 11 cases, please visit:
http://www.kccllc.net/coltdefense.
About Colt
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. For more information on Colt and its
subsidiaries, please visit www.colt.com.
Forward Looking Statements
This press release contains “forward-looking statements.” These
statements about Colt’s expectations, beliefs, plans, objectives,
assumptions and future events are not statements of historical fact
and reflect only Colt’s current expectations regarding these
matters. Colt’s actual actions and results may differ materially
from what is expressed or implied by these statements due to a
variety of factors, including (i) the potential adverse impact of
the Chapter 11 filings on Colt’s liquidity or results of
operations, (ii) changes in Colt’s ability to meet financial
obligations during the Chapter 11 process or to maintain contracts
that are critical to Colt’s operations, (iii) the outcome or timing
of the Chapter 11 process and the Section 363 process, (iv) the
effect of the Chapter 11 filings or the Section 363 process on
Colt’s relationships with third parties, regulatory authorities and
employees, (v) proceedings that may be brought by third parties in
connection with the Chapter 11 process or the Section 363 process,
(vi) the Court approval or other conditions or termination events
in connection with the Section 363 process, (vii) the increased
administrative costs related to the Chapter 11 process; (viii)
Colt’s ability to maintain adequate liquidity to fund operations
during the Chapter 11 process and thereafter and (ix) other factors
listed from time to time in Colt’s filings with Securities and
Exchange Commission. Forward-looking statements in this press
release speak only as of the date on which they are made and Colt
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
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MediaSard Verbinnen & Co.Matt Benson/Trevor Rees,
(212) 687-8080