Colt Defense LLC bondholders have acquired $37 million worth of the gun maker’s senior debt, giving them more ammunition to fight for a better deal in the company’s bankruptcy, the Wall Street Journal reported today. Colt, whose more than 175-year history includes the development of a revolver it calls “the gun that won the West,” is seeking to slash its roughly $358 million debt load in chapter 11 bankruptcy. Bondholders that had been poised to receive little in Colt’s restructuring have opposed the process, in part by challenging the company’s plan for an early August auction led by its private-equity backer, Sciens Capital Management LLC. After hashing out a deal over the weekend, bondholders purchased a $2 million position in debtor-in-possession financing — meant to fund Colt’s operations while it is in bankruptcy — and a $35 million prebankruptcy loan from hedge fund firm Marblegate Asset Management LLC.
