Colt's Manufacturing Co., whose long and rich history of gun making includes the Colt .45 revolver credited with winning the West, said yesterday that it had filed for bankruptcy court protection.
The 156-year-old company based in Hartford, Conn., said the Chapter 11 filing would not immediately affect its day-to-day operations.
A $10 million line of credit extended by the Connecticut Development Authority and Creditanstalt, an Austrian bank, will keep the company running and give the state majority ownership of the company.
Industry experts attributed the company's plight to excessive debt, the loss of military and police orders and an outdated line of revolvers with diminishing appeal for civilians wanting semiautomatic weapons.
Yesterday's filing was not the first brush with bankruptcy faced by one of the best-known gunsmiths in the United States.
The company dates to 1836, when Samuel Colt won a patent for a revolver and built a plant in Paterson, N.J., with financing from relatives. Sales were sluggish, and the Colt's Patent Arms Manufacturing Co. was bankrupt by 1842.
But Mr. Colt persisted in trying to sell arms to the military. The advent of the Mexican War in 1846 produced a big order for the .44-caliber Walker revolver, which he decided to produce in Hartford.
The company's most famous gun, the six-shot .45-caliber revolver, was introduced in 1872, 10 years after Samuel Colt's death. The Colt family owned the company until 1901, when it was sold to an investor.
In 1990, Colt's produced 145,010 guns, making it the seventh-largest gun producer in the nation, according to the Bureau of Alcohol, Tobacco and Firearms.
That year, Colt's, already in trouble, was purchased in a leveraged buyout by the Connecticut state pension fund and investors backed by Creditanstalt.
The bankruptcy filing caps several years of turmoil at Colt's. A dispute over wages and benefits in 1986 prompted one of the state's longest strikes. The company also lost out in bidding for a five-year contract beginning in 1988 to produce M-16 rifles for the Army, a contract it had held since the model was introduced in 1964.
In 1989, Colt Industries, its parent company at the time, put the firearms unit up for sale. The state pension fund invested $25 million and Creditanstalt lent more than $35 million to an investor group to help buy it in 1990.
The bankruptcy petition, filed Wednesday, listed total assets of $91.5 million and liabilities of $82.5 million.
Colt's, a high-profile business with 925 jobs, is a company that state politicians say they want very much to save. While Republicans criticized the state's original investment in 1990, critics of yesterday's plan were scarce.
"This is one crown jewel that doesn't leave the state of Connecticut," said Gov. Lowell P. Weicker Jr. "We think it's a hell of a good investment."
Colt's, one of Connecticut's oldest companies, said it would use bankruptcy protection to reorganize its finances. "We were on thin ice anyway," Ronald Stilwell, the president, said."There was not much flexibility to react properly to ups and downs."
One of those downs occurred last year, when orders from Kuwait worth millions of dollars evaporated after the gulf war ended abruptly.
The company's troubles were worsened by sluggish civilian demand, with buyers preferring cheaper "Saturday night specials" or more powerful guns, analysts said.