Colt Defense LLC., today filed Chapter 11 in federal bankruptcy court to remain open during an accelerated sale of long-time gun maker’s business operations in the US and Canada.

The move is the latest attempt by the struggling company to survive in an extremely competitive small arm industry.

Colt, the original maker of the M4 Carbine, seemed to lose some of its standing when the U.S. Army acquired expanded licensing rights in 2009 that made it possible for the service to invite other gun companies compete for contracts to build the weapon.

Before that happened, Colt had been the sole maker of the M4 for about 15 years.

In surprise move, Colt outbid FN Manufacturing to win four-year contract, worth $126 million, to make M240B machine guns for the U.S. Army in the fall of 2009.

But in February 2013, FN Manufacturing outbid Colt and Remington Arms Company to win a contract worth about $77 million to make M4s and M4A1s for the U.S. Army.

The drama all began when the Army chose Remington over Colt in 2012 the carbines. Colt protested that award twice.

The GAO did rule in favor of Colt’s first protest over the Army’s miscalculation of royalties it would receive for contract awards on its M4 design. The ruling forced the Army to rework the original solicitation so the vendors that fell into the competitive range could submit new price bids. All gun makers involved were forced to reveal their previous price bids for the original $84 million contract to keep things fair.

Colt officials then filed a second protest with the GAO three weeks after the Connecticut-based gun maker received the Army’s amended solicitation. The GAO denied Colt’s second protest.

Colt did win a $54.4 million contract last year, with Manroy USA, Spindale, N.C., to make heavier, M4A1 replacement barrels and front sight assemblies as part of the Army’s M4 Carbine Product Improvement Program for the conversion of M4s to M4A1 carbines.

But later that year, FN reclaimed its control over the M240B machine gun by outbidding Colt and winning an Army contract worth $84.6 million to make the 7.62mm MG.

It’s worth mentioning that Colt won $22.5 million contract from the Marine Corps to build 10,000 custom 1911 .45 caliber Close Quarter Battle Pistols for Marine special operators.

Colt’s decision to file Chapter 11 will allow it to continue its business operations with no impact on customers, vendors, suppliers and employees according to a June 15 press release.

Colt’s current sponsor, Sciens Capital Management LLC (“Sciens”), has proposed to purchase substantially all of Colt’s assets and assume secured liabilities and all liabilities related to existing agreements with employees, customers, vendors, and trade creditors, according to the release.

The notice of the pending sale to Sciens will be given to third parties and competing bids will be solicited, with an independent committee of Colt’s board of managers established to manage the bidding process and evaluate bids, according to the release.

“While entering Chapter 11 protection in the absence of a consensual agreement with our noteholders was not our preference and we do not take it lightly, we are confident it is the best path going forward and will enable us to continue to gain traction on a challenging but achievable turnaround in our business performance and competitive positioning in the international, U.S. government and consumer marketplace,” Keith Maib, Chief Restructuring Officer of Colt Defense, said in the release.

Colt’s existing secured lenders have also agreed to provide, subject to approval of the bankruptcy court, $20 million “in debtor in possession credit facilities” to allow for continuation of operations in the ordinary course of business during the Chapter 11 process. The entire process is expected to be complete within 60-90 days.

In addition to the U.S. business, Colt Canada Corporation makes the C7 rifle and C8 Carbine for the Canadian military.