Fleetwood Says Filing Will Halt Katrina Lawsuits
Fleetwood Enterprises Inc. said in court papers for its Chapter 11 bankruptcy filing that the action will halt all 289 lawsuits pending related to the Riverside, Calif.-based company’s supply of emergency trailers to victims of hurricanes Katrina and Rita.
According to a Wall Street Journal report, that includes lawsuits filed by Katrina victims that are set to go to trial later this year.
Fleetwood and fellow trailer makers Gulf Stream Coach Inc., Forest River Inc. and Keystone RV Co. are named in lawsuits filed by Gulf Coast residents who, displaced from their homes after the 2005 storm, took shelter in the travel trailers that the federal government purchased from them and from other companies.
As part of the federal government’s response to Katrina, Fleetwood was asked to build 7,500 special travel trailers and 3,000 manufactured homes. Now under bankruptcy protection, the Riverside, Calif., company is seeking to close the travel trailer division and is planning to sell its motorhome and manufactured housing units during its Chapter 11 case.
The lawsuits, which will go to trial in New Orleans beginning in September, accuse the companies of quickly assembling the trailers with formaldehyde-treated materials in an effort to make a quick buck from the disaster. The government may be named as a defendant in the suits, too, for its alleged negligence in the matter.
The government’s disaster relief agency, the Federal Emergency Management Agency (FEMA), was widely criticized for its role in the debacle and was accused of refusing to acknowledge that tests revealed unsafe levels of formaldehyde.