Fleetwood Enterprises, RV Maker, Seeks Bankruptcy

Fleetwood Enterprises Inc., the maker of motor homes and camping vans, filed for bankruptcy and may sell itself after losing more than 98 percent of its market value last year as U.S. shipments fell to a 30-year low.

The 59-year-old company, which had a loss every year since 2001, has assets of $558.3 million and debt of $518 million, according to Chapter 11 papers filed today in U.S. Bankruptcy Court in Riverside, California, where it is based.

“We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential buyers and definitively resolve our debt issues,” Fleetwood Chief Executive Officer Elden Smith said today in a statement.

Confidence among U.S. consumers plunged to a record low in February amid a deepening U.S. recession and a drop in demand for items such as cars and homes. Recreational-vehicle maker Monaco Coach Corp. filed for bankruptcy earlier this month, while Winnebago Industries Inc. in December reported a $9.6 million quarterly loss that exceeded analysts’ estimates.

Fleetwood has more than 60,000 creditors, court papers show. Its biggest unsecured creditor is Bank of America Corp., which may be owed $62.2 million. Caspian Capital Management LLC and Angelo, Gordon & Co. have unsecured claims of $32.4 million and $20 million, respectively.

RV Sales Plunge

Fleetwood had 5,500 workers in November, when it began firing employees and said it would close plants. Recreational-vehicle shipments fell 72 percent that month to the lowest since at least 1978. The company reduced its workforce to about 3,000 at 15 plants in 10 states. Fleetwood started in 1950 by making homes in factories and entered the RV market in 1964.

Demand for recreational vehicles sagged last year as gasoline and diesel prices rose to record highs. The lack of available credit is causing buyers to delay purchases and dealers to keep inventory low, University of Michigan researcher Richard Curtin said in a Dec. 4 note.

In the statement, Fleetwood said it will close its travel- trailer division, which had losses of $16.8 million last year and $65.3 million in 2007. The company said it will also seek a so- called debtor-in-possession bankruptcy loan from its senior secured lenders.

Fleetwood’s chief financial officer, Andrew Griffiths, said in court papers that the company sells through more than 2,150 dealers in the U.S. and Canada, which Fleetwood supports with warranties.

Reduced Liquidity

“A failure to generate sufficient cash from operations has reduced Fleetwood’s liquidity,” the company said in court papers. As a result the company cut spending on machinery, equipment and research, which had “a negative effect on sales and earnings.”

Fleetwood’s debt includes a secured credit facility of $135 million, 14 percent secured notes of $81.4 million and 6 percent notes of $151.3 million, court papers show. The company has 289 lawsuits pending in federal and state courts and in two Canadian provinces over warranties and personal injuries.

The company also makes multifamily residences and military barracks, and runs a fiberglass manufacturing operation and a lumber brokerage business, court papers show. Fleetwood’s 44 subsidiaries also filed for bankruptcy.

The case is: In re Fleetwood Enterprises Inc., 6:09-bk-14254, U.S. Bankruptcy Court, Central District of California (Riverside).