Colt Defense said its amended reorganization plan has been approved by a federal bankruptcy court. The company said the new plan significantly restructures and reduces outstanding debt and improves its capital structure.
A key element of the plan is a significant revision to retiree health benefits. Colt will convert the retiree health benefit from a self-insured component and a fully-insured component (both with costs it says exceeds the average claims experience), to a health reimbursement account model with a fixed, per participant contribution by the company. It said that amount would be based on historical average claims experience.
In a statement, Colt said its reorganization plan finalizes a global settlement of all outstanding issues in its bankruptcy proceedings, achieved through a consensus reached among its secured lenders, Morgan Stanley as the lender under Colt’s pre-petition and post-petition secured term loan facilities, the official committee of unsecured creditors appointed in Colt’s bankruptcy cases, Sciens Capital Management and the landlord of Colt’s West Hartford headquarters.
Colt officials said this is the last important milestone on its path to emerging from Chapter 11.
