The Colt Z40 was a collaboration between Colt and the then-relatively-unknown CZ firm. Colt was coming off two remarkably unsuccessful pistol launches in the early 1990s (the Double Eagle and the All American 2000), and needed something to offer in the duty pistol market. They arranged to sell a pistol made by CZ with a 1911-style grip combined with the excellent CZ-75 upper assembly and lockwork. The guns were chambered for .40 S&W because the recent 1994 Assault Weapons Ban had limited new production magazines to 10 rounds.
However, after only 800 had been sold, Colt backed out of the deal and dropped the Z40 from its catalog. Why? Because they had happened to use a Z40 as the base gun for a model "smart gun", and the public reaction was overwhelmingly negative. In the aftermath, Colt management threw out the Z40 as the proverbial baby in the bathwater, simply because it had been tarnished by the PR of the smart gun debacle.
CZ, for its part, made a few tweaks to the design (primarily replacing the DA-only lockwork with the DA/SA system for the CZ-75) and released it on their own as the CZ-40.