Gun maker Colt Defense LLC's emergence from bankruptcy has been thrown into turmoil by a default on a $15 million funding commitment by private-equity owner Sciens Capital Management, Dow Jones Newswires reported yesterday. After Sciens missed a December deadline to come up with the money bondholders scrambled to find more cash to cover most of the shortfall and ensure the deals designed to usher Colt out of bankruptcy stay in place. The Connecticut firearms manufacturer said in court papers that it is on track to emerge from chapter 11, but the role of its long-time owner remains to be seen. Sciens principal Daniel J. Standen, who is also chairman of the governing board of the Colt parent company, said in a court filing yesterday that the delay in funding was due to the need to document the new Colt investment as part of Sciens's effort to enlist its investors in the deal. The firm raises money separately for each new investment, Standen said, and in order not to hold Colt in bankruptcy, it negotiated a delayed timeline for participating in the capital raise.
