Attached files
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8-K - FORM 8-K - CHAMPION ENTERPRISES INC | k48589e8vk.htm |
EX-99.2 - EX-99.2 - CHAMPION ENTERPRISES INC | k48589exv99w2.htm |
EX-10.2 - EX-10.2 - CHAMPION ENTERPRISES INC | k48589exv10w2.htm |
EX-10.1 - EX-10.1 - CHAMPION ENTERPRISES INC | k48589exv10w1.htm |
Exhibit 99.1
Contacts:
Anita-Marie Laurie
Maya Pogoda
Sitrick And Company
(310) 788-2850
Anita-Marie Laurie
Maya Pogoda
Sitrick And Company
(310) 788-2850
Champion Enterprises Files for Chapter 11 to Restructure Debt
| Obtains $40 Million New Credit Facility | ||
| Operations to Continue During Restructuring Process | ||
| International Operations Excluded from Filing |
TROY, Mich. November 15, 2009 Champion Enterprises, Inc. (NYSE: CHB), a leader in
factory-built construction, today announced that it and its domestic operating subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company is
taking this action to improve its capital structure and further strengthen its competitive
position. The Companys operations in the United Kingdom and Canada were not included in and will
not be impacted by the filing.
In conjunction with the filing, the Company has obtained a $40 million debtor-in-possession (DIP)
credit facility from certain of its current lenders that will be available to fund post-petition
operating expenses and to ensure that it continues to meet its obligations to employees, customers,
and trade partners. A portion of these funds will be available for use outside the U.S. to ensure
the continued adequacy of working capital for the Companys non-U.S. operations.
The Company expects that this restructuring will be accomplished through a court-supervised sale of
its operations. The Company chose to pursue a broader sale process in which its lenders and others
may participate after opting not to accept a third party offer for the Company. To that end, the
Companys investment banker has already received initial indications of interest from a number of
parties expressing a desire to participate in this sale process over the coming weeks.
Our Company has operated for many years with a significant debt load. As weve had to downsize to
keep up with the declining markets, this debt has become increasingly burdensome, said Champion
Chairman, President and Chief Executive Officer William C. Griffiths. Despite our best efforts to
reposition the company for diversified growth, the continued challenging economic conditions both
here and abroad have negatively impacted our capacity for debt.
As a result, management and the Board decided that the Chapter 11 process provides us with the
most timely and orderly means to restructure our debt obligations and facilitate a sale and
recapitalization of the Company so we can be best positioned to capitalize on future opportunities.
Filing for Chapter 11 will allow us to maintain our going concern value for the benefit of our
stakeholders while we address current market realities.
Mr. Griffiths noted that in response to the challenging housing market and impaired capital
markets, Champion has already successfully implemented a number of initiatives aimed at improving
operating performance,
755 West Big Beaver Road, Suite 1000 | Troy, Michigan 48084
(248) 614-8200 | www.championhomes.com
(248) 614-8200 | www.championhomes.com
Champion Enterprises Files for Chapter 11 to Restructure Debt
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including the reduction of overhead costs, closure or idling of 15 underperforming manufacturing
facilities in the U.S. since mid-2006, staff reductions at operating plants to better match current
demand levels, increased focus on multi-family, military and commercial sales opportunities and
enhancement of single-family home product offerings.
Our balance sheet is the problem, not our operations. The next step in our reorganization is to
restructure our balance sheet and position our company to capitalize on the anticipated recovery in
the residential and commercial construction markets, said Mr. Griffiths.
The Company emphasized that daily operations are expected to continue throughout the restructuring.
The Company filed nearly 20 first-day motions covering the continuation of employees and business
operations, as well as post-petition DIP financing, the continuation of supplier payments, customer
warranty programs and 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 and employees
will be paid and continue to receive the same benefits as before the filing.
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 Mr. Griffiths.
Addressing our liabilities through the Companys bankruptcy filing is the last step in a
comprehensive restructuring we began some time ago. We fully expect to proceed through this
restructuring swiftly and with the strong support of our lenders. Throughout the process we will
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 Companys information line at (877) 857-7554 or (248)
614-8390 for international callers, which is staffed live Monday to Friday between 8 am and 6 pm
eastern standard time or visit the Companys restructuring website at www.championrestructures.com.
About Champion
Troy, Michigan-based Champion Enterprises, Inc., a leader in factory-built construction, operates
27 manufacturing facilities in North America and the United Kingdom distributing its products
through independent retailers, builders and developers. The Champion family of builders produces
manufactured and modular homes, as well as modular buildings for government and commercial
applications. For more information, please visit www.championhomes.com.
Forward-looking Statements
This news release contains certain statements, each of which could be construed to be
forward-looking statements within the meaning of the Securities Exchange Act of 1934. Actual
results may differ materially from anticipated results due to certain risks and uncertainties,
including but not limited to: the potential adverse impact of the Chapter 11 Bankruptcy filing on
the Companys business, financial condition or results of operations, including the Companys
ability to maintain contracts, trade credit and other customer and vendor relationships that are
critical to its business and the actions and decisions of the Companys creditors and other third
parties with interests in the Companys Chapter 11 proceedings; the Companys ability to obtain
court approval with respect to motions in the Chapter 11 proceedings and to develop, prosecute,
confirm and consummate one or more plans of reorganization with respect to the Chapter 11
proceedings and
Champion Enterprises Files for Chapter 11 to Restructure Debt
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to consummate all of the transactions contemplated by one or more such plans of reorganization.
Additional risks include, among others: the prospect of being delisted from the New York Stork
Exchange or other national or regional exchanges; the occurrence of any event, change or other
circumstance that could give rise to the termination of any DIP financing plans or support
agreements the Company has entered or may enter with its lenders or other entities; general
economic conditions in the markets in which the Company operates, including changes in interest
rates or currency exchange rates, the financial condition of the Companys customers or suppliers;
changes in housing demands from the Companys current estimates; availability of reasonable
retailer and consumer financing; the outcome of customer negotiations; the costs, timing and
success of restructuring actions; increases in the Companys warranty or product liability costs;
risks associated with conducting business in foreign countries; competitive conditions impacting
the Companys key customers and suppliers. These risk factors are discussed in the Companys most
recently filed Form 10-Q, 10-K and other filings with the Securities and Exchange Commission, in
each case under the section entitled Forward-Looking Statements, or Risk Factors.
These statements reflect the Companys views with respect to future plans, events and financial
performance. The Company does not undertake any obligation to update the information contained
herein, which speaks only as of the date of this press release.
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