Colt Defense (www.colt.com) — the gun maker that dates back to 1836, when Samuel Colt produced the first ‘revolver’ — has filed for bankruptcy due to a lack of orders from the government and poor sales from members of the public. The Connecticut-based company said it had initiated the voluntary Chapter 11 filing after creditors rejected an appeal to restructure its debt.

However, creditors have agreed to provide $20 million in emergency funding to keep operations running. Keith Maib, chief restructuring officer at the company, said: “While entering Chapter 11 protection in the absence of a consensual agreement with our note-holders was not our preference, we are confident that it is the best path.”

Mr Maib said that it will enable the company to “gain traction on a challenging but achievable turnround in our business performance and competitive positioning.” Under the plan, Colt will undertake an “accelerated sale” of its business operations to the Sciens Capital Management investment fund, which is its main shareholder. It expects the bankruptcy process to be complete within 60-90 days.