The maker of 'the gun that won the West' is reportedly filing for bankruptcy
Source: Business Insider
Colt Defense, the gun manufacturer that has been in business since the 1800s, is expected to file for Chapter 11 bankruptcy, The Wall Street Journal reported Sunday.
The publication cites people familiar with the pending action who say the company's "business execution issues" and some $355 million in debt are among the issues that led to the pending bankruptcy filing.
The West Hartford, Connecticut-based company is expected to continue operating during the bankruptcy process, the WSJ said.
Colt Defense has enjoyed success for much of the last century, thanks in part to lucrative contracts with the US armed forces, in which Colt was the primary manufacturer of the weapons used by front-line troops.
Read more: http://www.businessinsider.com/the-maker-of-the-gun-that-won-the-west-is-reportedly-filing-for-bankruptcy-2015-6
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dballance
(5,756 posts)I guess, inferring from the article, they were too invested in supplying the military? Maybe not enough consumer products?
Duckhunter935
(16,974 posts)dballance
(5,756 posts)To the right people to secure their continued military contracts.
Duckhunter935
(16,974 posts)I supervise one, lowest cost is one type and best value is another.
happyslug
(14,779 posts)Remington has been the primary firearm maker in the US since the Civil War (During the Civil War, it made more Muskets for the North then any other CIVILIAN maker and then undercut Colt's revolver price by what many consider a superior design revolver).
Side note: Remington's Revolver was the first revolver with a metal bridge over the TOP of the revolver, which made the Remington Revolver actually stronger then Colt. Remington also offered the 1858 Remington at a cheaper price then Colt did, but Colt later undercut Remington's price by 50 cents.
Here is the COLT 1860:
Here is the REMINGTON 1860:
Here is a Remington CONVERSION of a 1819 Musket to Percussion done in the late 1850s:
https://en.wikipedia.org/wiki/Remington_Model_1858
Photo of a conversion of a 1819 musket by Remington:
http://www.sharpsburg-arsenal.com/collection/rifles-/-muskets/m1816-remington-conversion-musket/prod_603.html
Remington's 1863 Rifle, purchased extensively during the Civil War:
After the Civil War, Remington found itself with an expanded factory and no new customers for its military firearms. They went into Typewriters and over seas sales of the then new Remington Rolling Block. The Rolling block was the most adopted firearm prior to the Bolt Actions Mauser that often succeeded the Rolling Block in the countries that had used the Rolling Block:
https://en.wikipedia.org/wiki/Remington_Rolling_Block_rifle
Just a comment that Remington was the dominate firearm company in the US post Civil War. Filing bankruptcy in 1889 only caused Remington Firearms to lose control over Remington Typewriters (and later Remington Razors), but Remington Firearms was the single largest maker of firearms in the US (And that includes the US Armory in Springfield).
Remington also made the Model 1917 Enfield during the last years of WWI (after making the model 13 Rifle for the British Army in 1915-1916, same action as the later Model 1917 but it ,303 British round instead of the 30'06 round in the Model 1917).
Remington won the contract to replace the Model M1 and Model 1903 and Model 21 Sniper Rifles (The last based on the M14 rifle) with its model 700 rifle in the 1960s (The Winchester Model 70 pre 1964 Action was considered better, but Winchester was in trouble in the 1960s and its quality was suffering and with a lack of funds not capable of getting its Model 70 up to standards, and the post 1964 Model 70 had no advantages over the Remington Model 700).
Colt has purchased the right to the AR-15 action and when the US Air Force adopted it in 1959, and its successful use by South Vietnamese Troops in the early 1960s against Viet Cong Armed with Russian SKS carbines, lead to the US Army to adopt it in 1964. Colt later received royalities from other makers of the M16 when the US Army decided to expand the numbers of makers of M16 in the late 1960s (once the trouble with the design was fixed).
Thus Remington had the much more profitable Sniper Rifle Contract, while Colt had the basic rifle contract in the 1970s. By the 1990s both were long past any patent date and Colt kept losing out the right to make AR-15s to other makers, in the latest set of M16 purchases it is REMINGTON that will make the M16s.
As to sniper rifles, no one has offered any reasonable alternatives to the M24, which is the Remington Model 700 upgraded to sniper rifle standards.
TheBlackAdder
(28,225 posts)Yep.
Folks who claim to be 'capitalists' mooching off of the public for their existence, only to leave by jamming those who've invested in their company--destroying families of those who held faith and trust in their actions.
Much like how 'capitalist' Trump gets people to invest in his firms, only to declare bankruptcy jamming most of them.
===
Those in power exit gracefully, while the investors get the shaft!
dballance
(5,756 posts)I'm not sure it can be associated with socialism.
Hoyt
(54,770 posts)gun lovers.
happyslug
(14,779 posts)Dupont owned Remington Firearms for decades, Olin Industries owned Winchester firearms. Both sold off the MAKING of firearms (Dupont sold off Remington in 1993, Olin has had an on and off again relationship with Winchester since 1981, selling off the factory, but retaining the Name Winchester then leasing the name to the company that purchased the factory).
Ammunition is where the steady profit are and both Dupont and Olin kept that part of the Firearm business while selling off who makes such firearms.
happyslug
(14,779 posts)Last edited Sun Jun 14, 2015, 10:14 PM - Edit history (1)
At least get your history of Marketing right, Colt's Campaign was "The Constitution said all men were created equal, Sam Colt made them Equal".
Colt Industries made the M16 in the 1960s onward, but lost control over the AR-15 platform in the 1990s long after the Patents expired and Computer controlled automation permitted smaller can makers to enter the field (And Remington, the big boy in the field. Remington was owned by Dupont till 1993 when sold Remington Firearms were sold to Clayton, Dubilier & Rice. LLC who in turn sold it to Cerberus in 2007:
https://en.wikipedia.org/wiki/Cerberus_Capital_Management
https://en.wikipedia.org/wiki/Remington_Arms
Dupont owned Remington till 1993.
https://en.wikipedia.org/wiki/Clayton,_Dubilier_%26_Rice
Remington has made the US sniper rifles since the 1960s (And the closing of the US Army's Springfield Armory, the US Army made its own small arms till the 1960s).
Winchester only made rifles, made some M1s during WWII, but almost all rifles and shotguns during its long life. Unlike Remington (and much like Colt) Winchester has had a hard time in recent decades. It was owned by Western Ammunition (later Olin Industries, same company different name) for decades, but now owned by FN out of Belgium (Via FN's Browning Firearms Company out of Utah):
https://en.wikipedia.org/wiki/Winchester_Repeating_Arms_Company
US Repeating Arms had the right to use the Winchester name staring in 1981 (Olin Industries decided to get out of making firearms but wanted to retain the name of "Winchester Firearms" so it just leased out the name after selling the plant that made Winchesters to US Repeating Arms which survived till 2006, when US Repeating Arms finally went out of business).
http://www.winchesterguns.com/
Winchester only started to use the Claim "The Gun that won the West" in the 1920s, long after the West was settled, but during the time period where Western Movies were the rage. One of the reason for this was the Model 1892 Lever Action Rifle could fire 44-40 ammunition. This was also usable in Colt Revolvers, thus in the movies you could use one set of blanks for both weapons. The 44-40 blanks could also be used in 45 Colt Revolvers. Thus a third set of weapons could use the same blanks (In Movies real bullets are AVOIDED, to dangerous, also blanks provide a bigger sound when fired and more smoke, the later important in the days of silent movie, the former important when sound was introduced).
In reality, the Gun the Won the West the Gun was the gun that Annie Oakley first used to hunt game to help feed her family, her late father's Kentucky rifle. Annie started to use it in the post Civil War era, became an excellent shot, married another marksmen, and later joined the Wild West Show, by then shooting a Winchester provided to her by the Winchester Company (Marketing was known even then).
https://en.wikipedia.org/wiki/Annie_Oakley
madville
(7,412 posts)God created man and Sam Colt made them equal
happyslug
(14,779 posts)And I would NOT be surprised if one is a variation of the other.
Crabby Appleton
(5,231 posts)Col. Colt made them equal, was the way I've heard it.
NutmegYankee
(16,201 posts)happyslug
(14,779 posts)In reality the Gun that won the West was the Kentucky Long Rifle, it was the weapon most used in the fights with the Native Americans from about 1700 till the mid 1800s.
The Ad Campaign, which is what I am discussing, started in the 1920s by Winchester to help sell Winchesters Rifles, especially its Lever Actions Rifles. Other's have claims other weapons won the west, but the AD Campaign was for Winchesters.
That was a very famous ad campaign, so famous that in the 1960s Western Comic Series "F-Troop" one of the episodes included references to the "Chester-Winster 76, the Gun that will win the West" as part of a parody of that ad campaign.
http://www.tv.com/shows/f-troop/the-new-i-g--155104/
NutmegYankee
(16,201 posts)Unlike rifles, it could be used on horseback and could fire several shots quickly. The Kentucky Pennsylvania Rifle was a great hunting weapon, but was rather slow to reload and other than use as a "sniper" rifle, was not a good battle weapon.
happyslug
(14,779 posts)First Rifles could be and were used on horseback (The US even had a Cavalry regiment called "Mounted Rifles" who did just that). As to rifles being hard to reload, but so were pistols and in any combat situation it is NOT how many rounds the weapons carries, but how fast can it be reloaded that is the key to winning (Surprising the Mongols used Bows and Arrows in modern Day Russia, till the late 1800s, for the same reason the Comanches used Bows and Arrows during the same time period, they were quick to reload in combat while horse mounted).
The percussion cap made Firearms reliable, but while invented in 1801, was NOT adopted by Any Army till 1830, when the British adopted it, the US Army did not adopt it till 1842). Prior to the percussion cap, the only real reliable weapon on the battlefield was the Saber, Lance, bayonet and the tomahawk. Firearms were used to weaken the enemy, but after firing 30-40 rounds most firearms were no longer usable and you either threw them away and used tomahawks OR charged with Bayonets. Percussion Caps permitted Firearms to fire almost all of the 60 rounds an soldier carried into battle at that time period, something unheard of since the replacement of Bows by Firearms in the 1500s in Europe.
The Texas Rangers make a big deal of their use of Colt Walker against Comanches in the 1840s but outside of them and other groups known to use pistols, pistols were just NOT used (The Colt Walker was a percussion operated Pistols, once its six shots were fired, you either had to remove the old cylinder and put in a new one, or reload each chamber, thus horse mounted troops retained the Saber till after the Civil War).
McClellan, JEB Stuart, and other Civil War Generals watched the Charge of the Light Brigade in 1854, from the Russian Lines. They impression was one that carried into Civil War and Post Civil War Horse tactics, horses were to get the men to the point of battle, then the men were to fight on foot. The only time Cavalry would charge on horseback if they blundered onto the enemy. If they had time, they dismounted and used rifles. When they blundered onto the enemy they used sabers and pistols, but true boot to boot cavalry charges were rare during the US Civil War, mostly due to how ineffective they were when facing infantry with percussion rifles (i.e. such a charge was considered suicidal).
Furthermore pistol have an effective range of about 25 yards, rifles can hit targets up to 1000 yards away. The "Average" range of person hit by bullets in 85 yards, with 95% of all person hits in combat between 50 and 250 yards. Pistols usability is limited, they look much better on film then in real life (a characteristic they share with hand grenades). You want something that hits into the 50-100 yard area, the Bow and Arrow can do that, Rifles can do that, shotguns and sub machine guns can reach the lower end of that range but not the upper range. Pistols are even worse.
Thus in most combat situation it is the Rifle you want. The shotgun (or its predecessor the smooth bore musket) and the sub-machine gun is the second choice. The Bow and Arrow is a superior choice over pistols in most combat situations.
Pistols were design to give horse mounted soldiers a firearm to use in the "Melee" where cavalry engaged other cavalry horse to horse. In such situations you do get within the range of a pistol, but you also tend to be within range of not only lances, but sabers. During an Actual Cavalry charge, if any firearms are used, they tend to be carbines (and with troops with Bows, Bows and Arrows).
Around 500 AD a Roman Emperor wrote a book about cavalry tactics he wanted his troops to use. These reflected the tactics of the people on the Steppes of modern day Russia around 500 AD. The first two lines were lancers, armed with 12-15 foot long lances, the next four lines were armed with Bows and Arrows, and told to shoot over the head of the troops in front of them. The last line again were armed with Lances. This was the tactics used in Europe till Firearms came into play (And then it was the use of CANNON to break up such large formation that lead to they demise, not the ineffectiveness of the tactics, tactics used by the Comanches and people of the Steppes till the mid 1800s).
Pistols came into use in the 1500s as a way to give the first two lines of a Cavalry charge the fire support they use to get from Bows and Arrows, for Cannon had lead to no longer packing any troops into 7 or more deep units. By the American Revolution it was common to have only two deep units (and it was on its way to one deep unit which became the norm by the time of the US Civil War).
To show you how effective pistols were, even in the Post Civil War West, just look at the Fetterman Massacre" (Through today they is a move to call in the Fetterman Fight). Captain Fetterman lead his troop of 81 men into the fight, armed with Carbines and Pistols. Red Cloud entered the fight with just Bows and Arrows. Of the 81 men killed, only six died of bullet wounds (and it is believe they were self inflicted). It was a classic ambush thus the high losses for the force being attacked and believed low losses (less then a dozen dead Native Americans) for the attacking force. The Pistols were useless.
https://en.wikipedia.org/wiki/Fetterman_Fight
The same is reported from the Battle of the Little Big Horn, most of the fighting was done on FOOT, only the movement of the troops were done while mounted, pistols were of little use, the Carbine was the weapon of choice (Except for One Soldier who carried a Sharps RIFLE, that he used to drive off Native Americans from a hilltop overlooking Reno's final defensive position, it had the range and accuracy to do so, the Carbines most of the Cavalrymen carried did not).
https://en.wikipedia.org/wiki/Battle_of_the_Little_Bighorn
My Favorite example of the use of combat in Battle is the Battle of Fort Fisher during the Civil War. The Army had the job of attacking the Fort from its three land sides, but the Navy insisted that they should attack the fort from the Sea side. This was to be three lines of Sailors armed with Cutlasses and pistols, with a fourth line of Marines providing Rifle cover fire. The Wikipedia page repeats the position that the Navy Attack drew forces from the Army Attack and thus should be considered a success, but in reality the sailors never came close to the wall and they and the Marines that followed them were massacred, none of these forces reaching the walls of the fort (The Army took the fort from the land ward side, with rifle equipped troops).
https://en.wikipedia.org/wiki/Second_Battle_of_Fort_Fisher#Battle
Pistols have a prestige to them, and people think they can protect them in a pinch. The problem is in combat, pistols just do NOT have the range needed. They are issued to troops whose job is NOT to engage the enemy, but to operate some other piece of equipment (Or command troops) and the pistol is to be used ONLY as a last resort. Among Cavalrymen, prior to the revolver, Pistols stayed on the horse, when they dismounted. They took their Carbine, Rifle or Musket with them instead. Starting with the US Civil War, Cavalry also started to leave their sabers with their horse (and given the increasing SMALL size of Revolvers started to take them with them dismounted, but many still kept them on the horse long after the Civil War).
Thus Pistols had a very limited role in combat. Officers would carry them to replace the Saber they had carried prior to the Civil War. In actual fighting during the "Settlement of the West" pistols were rarely used. During the major move west, 1754-1815, from the Start of the "French and Indian War" till the death of Tecumseh in 1814, the weapon that was used was what was then called the "American Rifle" (Later called the Pennsylvania and Kentucky Rifle). The Infantry still used Smooth Bore Muskets and bayonets and until the Great Plains were settled starting around 1840, Cavalry rarely was used (To many trees along the Mississippi River and East of that river).
US Cavalry forces prior to the US Civil War, consisted of six regiments. The oldest two, the First and Second Dragoons, made no bones of the fact they saw themselves as Dragoons, European horse mounted infantry as oppose to true Calvary. The Third Regiment was called the "Mounted Rifles" and it had rifles instead of the muskets of the Dragoons. Only in the 1850s did the US see a need to raise three more regiments, then called the 1st, 2nd and 3rd cavalry. In 1859 all three regiments were renumbered, the 1st and 2nd dragoons were renumbered the 1st and 2nd cavalry (But were permitted to were orange piping till their uniform wear out, orange was the color of Dragoons as opposed to yellow for cavalry). The Mounted Rifles became the 3rd cavalry, the former 1st, became the 4th, the former 2nd became the 5th and the former 3rd became the 6th Cavalry. These would remain the only Cavalry units in the REGULAR US ARMY till 1866, when the 7th, 8th, 9th and 10th Cavalry would be formed (You had a massive increase in Cavalry units during the US Civil War, but these were all state numbers units, 1st, Pennsylvania etc).
One last comment about the American Rifle. When Texas declared its Independence and Santa Anna Invaded Texas in 1836, Sam Houston told Travis to abandon the Alamo for it was undefendable (The Alamo had been built as a place for local to run to for protection from Raids, thus had strong walls, but it was assumed it would have more people inside the Alamo to defend the Alamo then any raiding party would have, the Alamo was NEVER intended to keep out a stronger force, the monks the built it never intended it to be anything more then a place for people to come to during raids by Comanches NOT to withstand a full scale attack).
Houston wanted the troops in the Alamo to join his army in East Texas. East Texas had something called "Trees". something the Mexican troops had NOT had to deal with as they march through Northern Modern Day Mexico and South Texas. It was also where Houston planned to destroy Santa Anna's Army.
Houston knew his men and their rifles. He had them fight what is often called the "Battle of the Trenches" (Named adopted during WWI for such fights, often fought between the trenches of the opposing sides during WWI) i.e. to control that land between where your forces are AND the enemy forces are. By San Jacinto, Houston had clearly won that fight. His Men with their America Rifles controlled the area outside Santa Anna's camp. This is where the American Rifle came into its own, accurate and reliable for one to two shots. That was all that was expected of such armed men, and once the weapon was fired, the riflemen would generally retreat to reload and fire again. No intent to hold any one part of ground, just force the Mexican troops to refuse to go into the woods. Once Houston had won that battle, he could move his troops right up to Santa Anna's camp without being detected and thus fire into the camp and charge into the camp before any organized resistance could be made.
Thus because he had won the battle of the Trenches. Houston could determine when the two army would meet, which he did when it was to his troops greatest advantage. The result was the battle of San Jacinto.
Winning the battle of the trenches had been the role of the American Rifle from about 1700s till the 1840s. When the American Forces could win that battle, the Native American forces would be routinely defeated (Battle of Kittaning, Fallen Timbers, Tippecanoe) . When the Native Americans would win that battle (Braddock's field, St Clair's Defeat) America would lose any subsequent battle. This is where the "American Rifle" came into its own. It permitted American forces to wind the "Battle of the Trenches" in most of the fights between Whites and Native Americans, and in 1836 against Santa Anna.
By the Civil War, the percussion cap had replaced the flintlock. The percussion cap increase reliability of firing of firearms to such a degree that most Armies switched to Rifles from Smooth Bore Muskets (With Flintlocks, you had one misfire every six fires, with percussion cap that reduced to a misfire in 1000 fires, in muskets the one is six misfires was acceptable for it was easy and quick to remove the undersized bullet from the smooth bore barrel and reload and fire again, In rifles, this was unacceptable except for special troops due to the bullet having to ENGAGE the grooves of the Rifle Barrel, the Rifle after a misfire could be out of action two to five minutes, thus George Washington's Order that every rifle regiment had to be supported by two musket equipped infantry regiments).
With the percussion cap, the disadvantage of rifling disappeared, for one misfire in 1000 fires was more then acceptable. One rifle out of a 1000 man regiment of Rifles out of action was acceptable (on the other hand in the days of flintlock, almost all of the rifles could be out of action within five minutes of combat, thus the need for musket backup).
Just some comments that pistols have a limited effectiveness in most combat situations. A man with a rifle will defeat a man with a pistol 99% of the time. That was known in the 1700s, thus pistols were not that popular outside of the Cavalry. It was known in the late 1800s, thus troops first took care of their rifles not their pistols if they carried pistols (and that was only the Cavalry and artillery and then only by those persons who could not also carry a rifle).
It is for the above reasons, that even as late as the 1970s only 10% of all firearms purchased in the US were Pistols. Pistols just do NOT have effectiveness of Rifles, shotguns or even spears and other weapons.
IDemo
(16,926 posts)Which firearm is ``the gun that won the West''? Two weapons hold the main claim to the famous slogan. Each hit the market in 1873.
Each was made by a company of monumental influence not only in the gun business, but also in all of industrial history, and in the heartbeat of American culture.
Is it the Winchester Model 1873 repeating rifle? Or the Colt .45-caliber ``Peacemaker'' single-action Army revolver?
Gun folks mostly agree, the Colt was the revolver handgun that won the West, and the Winchester the shoulder-arm that won the West. But would Wyatt Earp settle for such a watered-down claim? Would Teddy Roosevelt, or Buffalo Bill, or John Wayne? C'mon.
http://articles.courant.com/2006-01-22/business/0601210317_1_oliver-winchester-winchester-model-winchester-family
Interesting that the Winchester engineer (and later VP) behind the advertising slogan became the namesake for "Pugsley" on the Addams Family.
happyslug
(14,779 posts)The US Army primary weapon was the Model 1873 Trapdoor Springfield. Most Settlers, had either a surplus Army Rifle Musket from the Civil War era (cheap and reliable) or a Sharps or Remington Rolling block firing 45-70 ammunition (The Standard US Army round of the time period, a round to powerful for the Winchester model 1873, or 1876 to use, through the Model 1886 could fire it, but the Model 1886, while still a lever action, is a completely new design, unlike the Model 1876 which was a strengthen Model 1873).
American Rifles (The name given in the 1700s to the rifle later called the Pennsylvania and Kentucky Rifle) were still being made, for you did not need to buy case ammunition for such weapons and thus remained popular among rural populations in the Appalachian mountains till the 1930s, some makers surviving till the 1950s).
Stagecoach operators and law enforcement officers preferred shotguns.
Thus the weapons actually used in the FIGHTS to settle the West were NOT 1873 Colts (The US Army issued Colts AND Smith and Wesson Pistols to its troops in the post Civil War Era, the Smith and Wesson fired a weaker cartridge then the Colt but the Colt could fire the Smith and Wesson round, so it was the rounds that was issued). or Winchesters.
Wild Bill Hitckok carried a 1851 Colt for most of his life, but was killed wearing a Smith and Wesson Army pistol in 1876, and Buffalo Bill Cody carried a 1858 Remington till he gave it to the foreman of his ranch in 1905 (and only bragged about his Winchester, through his first report mention he was using a 1842 US Army Rifle in the 1860s).
Colts and Winchesters were premier guns, but most people in the west did NOT own one. They really came into their own with the advent of movies, both could fire the same blanks. Early westerns were NOT know to be historically accurate, they were filmed to make money, thus keeping costs low was important. The Model 1892 Winchester was much cheaper then the earlier 1873 so the 1892 became the gun seen in most westerns. Colts were much more expensive, but looked good on film, so having Colts around became the norm for Westerns.
Worse, we can NOT go by the photos of the time period. Most photos were taken in photo shops where the shop provided the weapons most cowboys are seen wearing. The pay was NOT that high, so Winchesters were generally to expensive, they retained the use of muzzle loaders for decades after the Civil War for such muzzle loaders were CHEAP and cap and ball ammunition was also much cheaper then cased ammunition. Thus Annie Oakley's story of using her Father's Kentucky Rifle in the 1870s makes perfect sense. Such Rifles were made till the 1950s in some shops in the Appalachian mountains for people who did NOT want to pay for cased ammunition (and these last shops provided some of the first weapons for the Civil War re-enactors before they became big in the 1960s).
Just a comment that the Colt reputation is more based on Movies then real life. The Winchester actually was used, but less used then single shot Springfields, Sharps and Rolling blocks.
davidpdx
(22,000 posts)It just means the business will be reorganized and some debt forgiven. Gee I wish it were that easy for us little people to do.
Hosnon
(7,800 posts)davidpdx
(22,000 posts)I thought I'd saw somewhere it was Chapter 11.
happyslug
(14,779 posts)Chapter 13 is restricted to Individuals with primarily consumer debts. Chapter 7 is where you discharge debts. Corporations can NOT file Chapter 7, they can file Chapter 11 for reorganization, but that can also lead to dissolution.
Hosnon
(7,800 posts)The equivalent for "little people", i.e., individuals, is Chapter 13.
happyslug
(14,779 posts)Corporations can NOT do chapter 7 (discharge of all debts) or Chapter 13 (When debts are primarily consumer in nature) but ONLY Chapter 11. Chapter 11 permits the assets of the company to be sold to pay creditors. Often in a Chapter 11, the entire company is "Sold" to new company, that is owned by the former creditors of the Corporation (This is what GM did when it declared bankruptcy, its former stock holders were mostly cut out and their creditors became they new stock holders, mostly the UAW and the Federal Government).
Chrysler also declared Chapter 11 bankruptcy, but in that case it was sold to Fiat, with its Creditors getting the money Fiat paid for Chrysler.
I suspect the same thing is going to happen to Colt, it will either emerge as a new Colt Industries, with new Stock Holders, OR be sold to someone. Hopefully the sale will NOT be like the sale of Schwinn Bicycle in 1992. In 1992 Schwinn Filed for Chapter 11 Bankruptcy, but after looking over its debt, the Bankruptcy Judge orders its assets, including the name "Schwinn" be sold. The name "Schwinn" was purchased by a speculator who later sold it to a Taiwanese Company, thus the "Schwinn" bikes you see on sale today has nothing in common with the Schwinns made prior to 1992 except for the name.
https://en.wikipedia.org/wiki/Schwinn_Bicycle_Company
Just a comment that this is a Chapter 11 filing NOT a Chapter 13 filing.
Hosnon
(7,800 posts)That was my point. And corporations CAN file Chapter 7.
happyslug
(14,779 posts)Thus technically Corporations can file Chapter 7, to do so is to turn themselves over to their State of Incorporation Court of Equity (or whatever is the State Organization that overseas its Corporations). It is the state that dissolves corporation not the Federal Bankruptcy Court (The Federal Government can also form corporations, but rarely does so, it is generally a power reserved to the states).
Hosnon
(7,800 posts)Secretaries of State have little do with business Chapter 7s. A trustee is appointed and the company is liquidated. Federal bankruptcy courts have jurisdiction, not state courts. Secretaries of States can administratively dissolve a company but that is not bankruptcy.
happyslug
(14,779 posts)Now, we may be talking cross purposes. A federal trustee can take the assets of a corporation and distribute them to its creditors but that is as far as he can go. That is what happen to Schwinn in 1992.
Now, in such a situation, the Corporation still exists for the Trustee has NO POWER TO DISSOLVE WHAT IS A CREATION OF A STATE. The Corporation has no assets, but it still exists (and can even have stockholders, stockholders of a corporations with no assets).
At that point it is up to the state that incorporated the corporation to dissolve it, or leave it exist. Many states just leave these corporation dormant, it fact it is possible to take over one of these corporation and revive it. Many years ago that was cheaper then incorporating a new corporation thus quite common at that time. Today is it much rarer for most states fees to incorporate are quite low and with a new Corporate Charter you do not have to worry about some old creditors showing up and demanding payment.
Furthermore, while I pointed out Chapter 7 is rarely filed in case of a Corporation, a Corporation can end up in Chapter 7, if its Chapter 11 plan does not work. That is what happened to Schwinn in 1992. There are really no advantage to a corporation to file a Chapter 7, the exemptions under Section 522 are aimed at private individuals not corporations thus as a general rule not usable by corporations (States may have exemptions that favor corporations in Chapter 7, but those are the same exemptions the corporation has outside of Bankruptcy, thus again no advantage for the Corporation to file Chapter 7).
Thus a corporation filing chapter 7 is like a person walking backwards from New York City to Los Angles, it is possible but the smart money is not on it. Most Corporations that end up in Chapter 7, started out in Chapter 11 but then the Bankruptcy judge, after a series of hearings, determines they is no way to save the assets of the Corporations, orders those assets sold after converting the case to a Chapter 7.
But the Bankruptcy Judge has NO POWER OVER THE CORPORATION ITSELF except to the ability to sell the corporation as a whole (as what technically happened to GM, when its plan was to sell its assets, including its name, to a New Corporation, "New GM". Old GM renamed "Motors Liquidation Company" ended up with most of the debts of "old GM" and is headed for dissolution but of 2015 still in existence and under Chapter 11.
https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization
https://en.wikipedia.org/wiki/Motors_Liquidation_Company
Motor Liquidation Company is still in Chapter 11, it is not yet resolved all of its debts.
http://www.motorsliquidationdocket.com/
Just pointing out the differences in power of the State that the Corporation was incorporated in AND Federal Bankruptcy Court. Federal Bankruptcy Court still views Bankruptcy as a CREDITOR REMEDY, i.e. it is to protect the assets of the CREDITORS not the Debtor. Debtors file bankruptcy, for when Bankruptcy was first instituted during the reign of Queen Elizabeth I, it was found that the Creditors needed the cooperation of the debtor for Bankruptcy to work. Debtors, outside of Bankruptcy, have great insensitive to hide assets. To get debtors cooperation it was decided to give them a complete discharge of debts in exchange for turning over all of their assets to a Bankruptcy Trustee, who in turn distributed to the creditors.
Now, even during the reign of Queen Elizabeth certain assets were viewed as exempt from attachment, and that existed outside AND inside of Bankruptcy. The problem is, those exemptions were aimed to keep someone off the welfare roles NOT to help a corporation to stay in business. That remains the case today. Thus individuals have reasons to file Chapter 7 bankruptcy, for they can claim those State exemptions OR the Federal Exemptions listed in Section 522 of the Bankruptcy Code. Corporations rarely need those exemptions, thus no advantage for them to file Chapter 7 bankruptcy.
On the other hand Chapter 7 of the Bankruptcy Code (and Chapter VII of the old 1898 Bankruptcy Act) were aimed at businesses that were viable but ran into financial hardship. i.e. would be profitable but not right now. These type of reorganization actually started during the period 1875-1898 under various State Reorganization plans that various states adopted in that time period, a time period when the US had NO BANKRUPTCY LAW (and under the US Constitution only the Federal Government could do Bankruptcy).
When Congress decided to write a new Bankruptcy Law in 1898 they added what such Reorganization in Chapter VII of the 1898 Act, and modified it in the Bankruptcy Code Chapter 7 in 1976 when the Code was adopted. The State reorganization laws were ruled Constitutional as long as no Federal Bankruptcy Act was in force, thus the state laws were effective in the period 1875 to 1898 but not since then. The rationale was since Corporations were creations of the State the State could reorganize them if needed AND if such corporation agreed to such reorganizations AND no discharge of debt occurred (States can NOT discharge debts for that would mean a "Law impairing the Obligation of Contracts" which is forbidden to the states by Article 1, section 10 of the US Constitution) and that the delay in the payment of debts was NOT an impairment of a Contract, such reorganization were Constitutional in periods with no Federal Bankruptcy law.
In 1898 Congress passed a Bankruptcy Act, but by then the concept of Reorganization had become widely used and thus incorporated into the Act. Unlike the States, Congress CAN IMPAIR CONTRACTS, thus Congress gave Bankruptcy Courts the power to discharge debts AND reorganized businesses. That remains the law to this day.
While Bankruptcy Court has the power to sell all of the assets of a Corporation and even the corporation itself, technically the Corporation is a Creation of a State and as such only the State that incorporated it can dissolve it. Bankruptcy Court can leave the Corporation as an empty shell that no one wants, but it is still a creation of the State and only the State that Created it can dissolve it.
Hosnon
(7,800 posts)I assume some of that information is correct, but it's tangential to the point of this subthread.
I am a bankruptcy attorney. I would rather have not brought that up but I don't now think we are discussing this with a similar - and very relevant - background.
happyslug
(14,779 posts)Now, when I was in law School, Pennsylvania had just changed its corporation law and one of the reason for the change was In Pennsylvania it had been common practice to revive old corporations for it was cheaper then getting the state to issue a charter for a new one. The Corporation law changed that but it was a hot topic in Pennsylvania in the 1980s.
Since law school I have not done ANY Corporation or business law, but I have done consumer bankruptcy. I do file Chapter 7s and Chapter 13s on a constant basis. The only business law I run across is when a client is being chased by creditors from a defunct business, mostly NOT incorporated. In such cases Chapter 7 works, but then I am protecting homes of private individuals not assets of a Corporation. I did have a client that owned a Corporation and I had to tell him that Bankruptcy would NOT save the Corporation. The Corporation was profitable but the client was NOT. I had to tell him he would have to sell the Corporation or turn the corporation over to the Trustee to distribute to any and all creditors. He had heard bankruptcy could have saved a business, but he was the person in financial problems NOT the corporation he wanted to declare bankruptcy. I had to tell him it was NOT a two way street. If he was solvent and the Corporation was bankrupt, then bankrupting the Corporation would NOT affect his personal assets, but the reverse was NOT true, his filing bankruptcy would NOT permit him to keep a profitable corporation and his creditors get nothing. He later went elsewhere.
Now, since I do no business law, I will have to defer to you when it comes to Chapter 7 and corporations, but given my practice and knowledge I see no advantages to filing Chapter 7 when it comes to most businesses. Chapter 11 makes sense, for it permits rearrangements of payments, but I have NEVER done a Chapter 11 and probably never will, it is outside my expertise. I refer such cases to attorneys who handle such cases.
I recently had a case involving state law and bankruptcy. That law related to abandonment of property by a tenant. Pennsylvania adopted a law in 2012 where a Tenant who had NOT removed her property from a house she had been evicted from within 10 days of being removed from the rental unit, loses all rights to that property. Subsequent to the eviction I filed bankruptcy for her to recover her personal property for it is clearly under the exemptions of Section 522 of the Bankruptcy Code. The landlord said she since did NOT recover the property within the ten day period, it is his property by state law. I pointed out that state law assumed the Tenant did NOT make an attempt to get the property, and in the case I had she had, but the landlord refused to turn the property over to her unless she paid on the rent due. I pointed out the State Law Clearly assumed the Tenant would have made not attempt to recover for if such a intent was made the law required the landlord to work with the tenant to recover the property.
Thus I had to review the background on bankruptcy and that it is a CREDITOR REMEDY but the debtor exemptions exist to permit the debtor to restart his or her live. Bankruptcy is also an act in EQUITY not Law, and thus the rule of equity, "To get equity, you must be willing to do equity" also comes into play. The Bankruptcy court MUST treat all parties fairly within the Bankruptcy code. The Bankruptcy judge has NOT made a decision in the case. No one will cite it, for in 2014 Pennsylvania rewrote the whole law for it had NOT been working, thus his decision covers a law that was in effect for only two years.
Thus I had to do some research on that State Law AND how State Law and Bankruptcy Law interact. Where Bankruptcy law is silent, State law is what governs the case. Given that Bankruptcy Courts are set up to protect Creditors AND Debtors that is their main function and will do so.
On the other hand, Corporations are generally the creation of a State and as such the rules that applies to Corporations are state laws. Bankruptcy Courts are to take the assets of any debtor and distribute them to the debtor's creditors in a way to maximize return to those creditors. At the same time, the Court has to give the Debtor the right to the exemptions under the Code to the maximize possible. In the case of most businesses, the Code is NOT that generous. State Law may be better (Pennsylvania exempts $300 and "Tools of the Trade" from attachment, thus it is rare in Pennsylvania for someone to take the state exemption outside of Mechanics or other people with thousand of dollars in tools, I have heard of such cases but I have never had one).
As to this all being "tangential to the point of this sub thread" but that is the purpose of sub threads for sometimes the sub threads addresses issues that need to be addressed and it is the best way to bring such topics up to people.
One_Life_To_Give
(6,036 posts)Will the state go to bat for Colt again this time?
ileus
(15,396 posts)For instance Ruger...
355 million in debt???
What to hell have they been spending their money on? Not R&D from what I can tell, other than that plastic 380 what new product have they come out with lately???
Xithras
(16,191 posts)Colts are typically two to three times as expensive as their competitors, without any substantial difference in quality. They skated by for years on military contracts and by milking sales from people who bought into the whole "you get what you pay for mentality", but those days are ending. We now live in Walmart America, where low price is king, and Colt can't support an entire company on the relatively small percentage of buyers who will pay a premium for their "historic" name.
happyslug
(14,779 posts)The Colt Single Action Army (SAA) is NOT that expensive to produce but it has no safety and is basically the same weapon designed by Sam Colt's Widow in 1873. Its hammer rests on the round of ammunition in the chamber and has been known to hit the round while being carried in a holster (thus the old practice of never carrying Colts SAA except over an open chamber).
While a simple gun, the SAA is considered one of the three most dangerous guns sold in the US (the other two are Remington Model 700s and Russian made SKS semi automatic rifles, both have very poor safety designs, through Remington has said it has improved the safeties in the Model 700 over the last 20 years). Colts has long known of the problems with the SAA, but the demand for them is so high Colt could overcharge enough to cover any lawsuits that could result from the lack of a Safety on the SAA.
https://en.wikipedia.org/wiki/Colt_Single_Action_Army
The other profit center was the Colt had purchased the rights to the AR-15 in the 1950s, when the US adopted the AR-15 as the M16, Colt was the only maker. Since Colt owned the patent rights, when the US Army expanded production to other companies, Colt received a royalty for each one made by these other companies. The AR-15 was patented in 1957, thus the Patent expired in 1973 unless "Renewed" under special circumstances. I do NOT know if that happened, but given that is the time period of a massive increase in M16 production I can see the patent being renewed for "National Security Reasons" as the rationale. That MAY have added another 15 years, i.e. to 1987. Thus you started to see "Clones" of the AR-15 in the 1990s when the Patent had long expired, but Colt was still the dominate maker of AR-15s till after 2000.
https://en.wikipedia.org/wiki/AR-15
The Term "AR-15" is a Trademark owned by Colt Industries, thus only Colt AR-15s can be marked or sold as "AR-15s", through many other makers say they weapons are "AR-15 Clones" or use "AR-15 Actions".
In 2012 Remington Fire Arms won the Military Contract for M16s Rifle and M4 Carbines (16 inch barrel version of the M16, which uses a 20 inch long barrel).
http://www.thefirearmblog.com/blog/2012/04/23/army-buying-m4-carbines-from-remington-colt-still-earning-royalties-for-m16-design/
Now, Colt still has the Patent rights to the technical drawings of the M4, and will retain the sole right to them till 2017, but that is NOT anywhere near as profitable as the AR-15 mechanism itself. Thus Colt filing bankruptcy and we may see Colt as Part of Remington within a few years (or FN, depending on which of these two arms giants wants Colt the most).
Response to IDemo (Original post)
Freelancer This message was self-deleted by its author.
happyslug
(14,779 posts)Pensions are classified as Creditors in Bankruptcy, thus in most Chapter 11s, the Pensions become Stock in whatever is the surviving company. Some value may be lost, if the surviving company is worth less then its debts (i.e. the stock issued to the Creditors, including any pensions, is what is left of the Pension, if total debt exceeds total value, the debt will be reduced to the value and then divided among the creditors based on how much is owned to each creditor).
If the pensions were invested in the stock of the existing company, then that money is gone along with the rest of the investments by them and other stockholders.
Thus the answer depends on what the Pensions were invested in and how. In the GM bankruptcy, the UAW ended up with much of the new stock, to fund the pension fund. GM was "relieved" of the duty to pay those pensions, the UAW assumed that duty in exchange for much of the stock of the "New GM".
While technically collective bargaining agreements can be voided in Bankruptcy, to do so could lead to a strike (no contract no work is still legal even if the company is in Bankruptcy), thus most companies agree to re-affirm such contracts as part of the Bankruptcy, I do NOT know the details of the Chapter 11 plan of Colt, but I suspect reaffirmation of such contracts is part of the plan, if not the workers would be looking at going on strike or otherwise protesting this bankruptcy.
Response to happyslug (Reply #30)
Freelancer This message was self-deleted by its author.
wordpix
(18,652 posts)A hundred guns for every household at least is their mantra.
hack89
(39,171 posts)they are simply not a well run company despite making excellent guns.
ileus
(15,396 posts)the market.
No one wanted a poly sub compact 1911 380.
They could have snagged some of the civilian conceal carry market with fullsized and compact poly pistols.
Being #1 on the left side of the AR chart will only take you so far in life.
