Bloomberg: Colt ‘New York Financiers Borrowed Too Much,’ Spent Too Much

Colt Defense LLC is filing for Chapter 11 bankruptcy protection in a situation where the future could bring a Colt that looks little like its iconic predecessor—if any part of Colt remains at all. Bloomberg Business (BB) is reporting that the American legend’s current problems are the result of “New York Financiers” who “borrowed too much” and took too much as well.

According to BB, signs of Colt’s current demise has been evident since “the mid-2000s,” when “the private equity firm Sciens Capital and its affiliates loaded Colt with debt… while taking cash out in the form of ‘distributions’ and ‘advisory fees.'”

To put it plainly, “the New York financiers who control the company borrowed too much and paid themselves lavishly.” And throughout this pattern of borrow, spend, borrow, spend, Colt failed to make the changes necessary to keep with a gun market that gave up clunky and heavy for tight and light.

As Breitbart News previously reported, the consensus opinion of those looking from the outside in is that Colt depended on its military contracts and failed to keep up with the times regarding the civilian market. In the end, Colt lost a strong foothold in both—the Army did not renew a contract for Colt M4s in 2013 and the civilian market went to lighter gunmakers like Glock.

On top of this, Colt missed out on being part of the “Obama surge” wherein gun manufacturers saw profits soar during an unprecedented run on guns following a gun control push by Obama and Senator Joe Manchin (D-WV). Now they are dealing with hundreds of millions in debt—up to $500 million according to Bloomberg Business—and pursuing credit simply to keep current operations alive.

Follow AWR Hawkins on Twitter @AWRHawkins. Reach him directly at awrhawkins@breitbart.com.