Attached files
file | filename |
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8-K - PALM HARBOR HOMES INC /FL/ | v204049_8k.htm |
EX-10.3 - PALM HARBOR HOMES INC /FL/ | v204049_ex10-3.htm |
EX-10.2 - PALM HARBOR HOMES INC /FL/ | v204049_ex10-2.htm |
EX-10.4 - PALM HARBOR HOMES INC /FL/ | v204049_ex10-4.htm |
EX-10.1 - PALM HARBOR HOMES INC /FL/ | v204049_ex10-1.htm |
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PALM
HARBOR HOMES FILES FOR CHAPTER 11 TO PROVIDE LIQUIDITY
Receives
Commitment for New Credit Facility from Fleetwood Homes
Continues to Design, Engineer and Produce Homes and Buildings
Standard Casualty Entities and CountryPlace Mortgage Entities Excluded from Filing
DALLAS, Texas – (November 29, 2010) –
Palm Harbor Homes, Inc.
(NASDAQ: PHHM) today announced that it and five of its domestic
subsidiaries, Palm Harbor Manufacturing L.P., Palm Harbor Albemarle L.L.C., Palm
Harbor Real Estate L.L.C., Palm Harbor GenPar L.L.C. and Nationwide Homes Inc.
(collectively the “Company”), filed voluntary petitions for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. The Company is taking this
action to provide liquidity and partner with Fleetwood Homes, Inc., a subsidiary
of Cavco Industries, Inc. (NASDAQ: CVCO) through a sale process pursuant to
Section 363 of the Bankruptcy Code in order to support ongoing
operations.
In
conjunction with the filing, the Company has received a commitment of $50
million, which may increase to $55 million if certain conditions are met, for a
debtor-in-possession (DIP) credit facility from Fleetwood Homes that will be
used to extinguish all obligations due on the existing Textron Financial
Corporation facility and fund post-petition operations, commitments to
customers, and employee obligations.
“Prolonged
poor industry conditions have depleted the liquidity of Palm Harbor Homes
despite management’s ongoing efforts to improve and scale back operations as
prudent and restructure our existing debt. Over the last several
months, we have a conducted a thorough process to identify the best capital
partner for our Company,” said Larry H. Keener, chairman, president and chief
executive officer of Palm Harbor Homes.
“Management
and the Board have decided that the Chapter 11 process is the best alternative
available for all stakeholders and provides us with the most timely and orderly
means to recapitalize our Company. In support of this decision, we
are pleased to announce our commitment for Debtor-In-Possession financing with
Fleetwood Homes to provide us the liquidity runway to participate in a court
approved 363 auction process to seek the highest recovery for our various
stakeholders,” added Keener.
Fleetwood
Homes, Inc. is owned by Cavco Industries, Inc. and Third Avenue Value Fund
(TAVFX). Third Avenue Management, the investment advisor to TAVFX, is
a New York-based company with expertise in value and distressed
investing. A subsidiary of Fleetwood Homes, Inc. will be the stalking
horse bidder for the assets and certain warranty and other liabilities of the
Company.
Palm
Harbor Homes’ affiliates, Standard Casualty Company, Standard Insurance Agency,
Palm Harbor Insurance Agency and CountryPlace Acceptance Corp., were not
included in and their operations will not be impacted by the
filing. These entities will, however, be included in the merger that
results from the auction process.
Joseph H.
Stegmayer, chairman, president & chief executive officer of Cavco
Industries, Inc. added, “We are pleased to have this opportunity to partner with
Palm Harbor Homes and look forward to a successful outcome of this
process. Our mutual intention is to help Palm Harbor continue its
heritage of providing quality home building, retailing, finance availability,
competitive insurance products and outstanding customer service. Our
combined businesses will have a strengthened foundation and market
presence.”
The
Company emphasized that daily operations are expected to continue uninterrupted
throughout the restructuring. The Company filed approximately 20
“first-day motions” covering the continuation of employee programs and business
operations, as well as its post-petition DIP financing, the continuation of
supplier payments, customer contract and warranty programs, retailer rebate
programs, and other case administration matters. The Company
anticipates that these first-day motions will be heard this
week. Pursuant to the relief requested in those motions, homes will
be sold, manufactured and delivered as normal, employees will be paid and will
continue to receive the same benefits as before the filing and all customer
contracts and warranties will be honored.
-MORE-
15303
Dallas Parkway, Suite 800, Addison, TX 75001 • Voice: (972) 991-2422
• Fax: (972) 991-5949
www.palmharbor.com
PHHM
Files For Chapter 11 To Provide Liquidity
Page
2
November
29, 2010
“Despite
the current challenges in our core markets, we still believe there are
considerable opportunities in the factory-built construction industry in the
future,” said Keener. “We fully expect to proceed through this restructuring
swiftly and continue designing and manufacturing high quality products for our
retailers, builders and developers.”
The
Company filed its voluntary petitions in the U.S. Bankruptcy Court for the
District of Delaware in Wilmington.
For
further information please contact the Company’s toll-free information line at
1-888-220-3896 or visit the Company’s restructuring website at www.restructure.palmharbor.com.
The
Company’s legal advisor is Locke Lord Bissell & Liddell; its financial
advisor is Raymond James & Associates and its restructuring advisor is
Alvarez & Marsal.
The
Company also announced today that it has appointed Brian Cejka of Alvarez &
Marsal as its Chief Restructuring Officer. Mr. Cejka will report to
the Company’s Chief Executive Officer.
About
Palm Harbor Homes, Inc.
Dallas,
Texas-based Palm Harbor Homes is one of the nation's leading manufacturers and
marketers of factory-built homes. The Company markets nationwide
through vertically integrated operations, encompassing manufacturing, marketing,
financing and insurance. For more information, please visit www.palmharborhomes.com.
Forward-Looking
Statements
This
Press Release contains forward-looking statements that are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. The most significant among these risks and
uncertainties are: (i) the ability of the Company to continue as a going
concern; (ii) the Company’s ability to obtain Bankruptcy Court approval
with respect to motions in the chapter 11 cases; (iii) the ability of the
Company and its subsidiaries to develop and consummate one or more plans of
reorganization with respect to the chapter 11 cases; (iv) the effects of
the Company’s Bankruptcy Filing on the Company and the interests of various
creditors, equity holders and other constituents; (v) Bankruptcy Court
rulings in the chapter 11 cases and the outcome of the cases in general;
(vi) the length of time the Company will operate under the chapter 11
cases; (vii) risks associated with third party motions in the chapter 11
cases, which may interfere with the Company’s ability to develop and consummate
one or more plans of reorganization once such plans are developed;
(viii) the potential adverse effects of the
chapter 11 proceedings on
the Company’s liquidity or results of operations;
(ix) the ability to execute the Company’s business and restructuring
plan; (x) increased legal and professional costs related to the Bankruptcy
Filing and other litigation; (xi) the Company’s ability to maintain
contracts that are critical to its operation, to obtain and maintain normal
terms with customers, suppliers and service providers and to retain key
executives, managers and employees. The cautionary statements
provided above are being made pursuant to the provisions of the Private
Securities Litigation Reform Act of 1995 (the “Act”) and with the intention of
obtaining the benefits of the “safe harbor” provisions of the Act for any such
forward-looking information. Additional risks that may affect the
Company’s future performance are detailed in the Company’s filings with the
Securities and Exchange Commission, including its most recent Annual Report on
Form 10-K and its Quarterly Reports on Form 10-Q.
Contact:
Brian
Ceika
Chief Restructuring Officer
1-888-220-3896
-END-
15303
Dallas Parkway, Suite 800, Addison, TX 75001 • Voice: (972) 991-2422
• Fax: (972) 991-5949
www.palmharbor.com