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Fleetwood Works to Secure Financing
Posted By RVBusiness On April 1, 2009 @ 4:52 pm In Breaking News | No Comments
Since filing for Chapter 11 bankruptcy protection earlier this month, Riverside, Calif.-based RV maker Fleetwood Enterprises Inc. has received the court’s go-ahead to pay what it owed utilities, workers compensation benefits and employees, among other items, according to the Riverside Press-Enterprise.
The company also has been granted permission to honor its warranties and dealer incentives — good news for the company and the company’s largest dealership, Lazydays RV Supercenter in Tampa, Fla., which has $15 million worth of Fleetwood inventory on its lots and $1.2 million worth of warranty claims on its books, according to statements at a recent bankruptcy hearing.
What remained uncertain as of late last week was the company’s efforts to obtain debtor-in-possession financing — a key that would allow Fleetwood to continue operating while officials try to find someone to buy the company.
A budget submitted in court filings forecasts the company’s sales and expenses from March 15 through June 14. According to the budget, Fleetwood expects to sell $81 million worth of products in that time.
But the company’s purchases, payroll, operating costs and more would cost it $103.3 million.
Fleetwood also needs $8.7 million to secure a bond to build military housing at Fort Bliss in Texas — part of a multi-million Defense Department contract.
The difference could be paid with debtor-in-possession financing — essentially a line of credit to keep it operating while a buyer is sought.
That’s where Bank of America, which has been a lender to Fleetwood, stepped in to offer an $80 million line of credit. However, it proposed charging Fleetwood $2.4 million in closing fees.
Hamid Rafatjoo, an attorney representing creditors, called the fee “outrageous” during last week’s bankruptcy hearing.
Wording in the more than 200-page financing proposal also indicated that the bank or Fleetwood could raise the $80 million credit limit at will without informing anyone else, Rafatjoo said.
“The committee isn’t going to support giving away the entire business to the bank,” he said.
A final proposal is due to the court by April 21.
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