Colt named in $500K breach of contract suit after reducing production
By Daniel Terrill
A lawsuit over a contract agreement says Colt’s Manufacturing owes a New Jersey financial firm half a million dollars after the gun maker gave too short a notice to reduce a production run.
Prestige Capital contends the Connecticut gun maker paid some $600,000 after adjusting an agreed upon minimum purchase order, but failed to make the final payment of $500,001.35, according to the complaint filed in a Connecticut federal court last month.
Court documents show Colt contracted out manufacturing for rifles and gun parts to Bold Ideas, through Texas manufacturer Chazkat, in November 2015. Yet, Bold Ideas sold all accounts — that would later include Colt — to Prestige the year before for an advanced payment.
The agreement required Bold Ideas to manufacture at least 6,000 rifles per quarter unless Colt requested fewer, but Colt had to submit the request at least 60 days ahead of the adjustment.
In a letter submitted as evidence, Colt requested Bold Ideas adjust production “immediately” in March. “As previously discussed, due to severe contraction in market demand for Expanse rifles, effective immediately, Colt hereby reduces its purchase order to 800 units per month, or a new quarterly rate of 2,400 units,” a Colt executive said.
Colt released an economical,