Colt foundered financially after losing key military contracts. Bondholders blame Sciens for letting the military contracts slip away due to alleged failure to invest to keep Colt competitive. Sciens denies mishandling the company. Colt, Sciens and a lawyer for bondholders didn’t respond to a request for comment on the interest from the Morongo.
The Morongo aren’t taking sides, said Vickie Driver, a Texas bankruptcy lawyer advising the tribe on how to find a way in to the chapter 11 action. “We’re open, ready to talk. Colt needs something to right its ship,” she said.
One of the largest tribal business conglomerates, the Morongo run a $250 million resort and casino on tribal land, as well as a golf club and travel center. The tribe also owns the Hadley Fruit Orchard stores and online business, and it has an alliance with Nestle Water North Americas which sells water bottled at a $26 million plant on the reservation. “Manufacturing in the Northeast is a very good diversification play,” Mr. Ryce said.
If it is money Colt needs, the tribe has it, Mr. Ryce said. Colt could still be put up for sale, and if it is, the Morongo will bid. Should the company choose a turnaround plan, the Morongo could step up as a chapter 11 plan “sponsor,” or outsider that funds the relaunch of a reorganized business.
If it’s an advantage in winning back U.S. government military supply contracts lost in recent years, the tribe has that, too, thanks to federal programs for Native American businesses, Mr. Ryce said.
Colt makes sense as a business investment for the Morongo. The tribe’s interest, however, is economics tinged with patriotism, according to its lawyer.
Full Story @ [Wall Street Journal]