The U.S. Bankruptcy Court will allow Riverside, Calif.-based Fleetwood Enterprises Inc. to pay key executives a total of $873,669 in incentives and bonuses and $571,508 worth of severance payments, after lawyers with the company, the U.S. trustee and the attorney representing unsecured creditors in the case supported the plan’s approval.
Executives who have been promised incentive bonuses ranging from $232,000 to $51,450 include Andrew M. Griffiths, senior vice president and chief accounting officer; Leonard J. McGill, senior vice president, general counsel and secretary; James F. Smith, vice president and operations controller; Paul C. Eskritt, president of the RV division; Charles E. Lott, president of the housing division; and Michael B. Shearin, senior vice president human resources, according to the Riverside Press-Enterprise.
The bonuses are based on the senior executives’ ability to complete a reorganization plan that is confirmed by the court by Oct. 30. The bonus amount decreases the longer it takes. In court filings Fleetwood also said incentives were offered to keep key personnel with the company rather than risk they would leave for work elsewhere during reorganization.
Five other executives would also be eligible for bonuses. Another 32 employees would be eligible for severance.
Elden Smith, Fleetwood’s CEO, agreed to cut his salary from $873,000 annually to $60,000 to compensate for some cost of the incentives.
Hamid Rafatjoo, a lawyer representing the committee of creditors in the case, said he took issue with an earlier proposal with a larger amount of bonuses but was happy with the plan approved by the court Wednesday.
“People did in fact work late in the night and into weekends,” he told Judge Meredith Jury, adding that they did so in an effort to get higher bids for the company’s RV division, to no avail.
“They do deserve combat pay for dealing with that RV buyer,” he said, referring to American Industrial Partners. The New York equity firm bid $53 million for the RV division. The deal hasn’t closed.
Jury agreed, saying an “enormous amount of work” has been done by Fleetwood to attempt to get multiple bidders for its assets.
“To have one bidder is probably lucky,” she said, considering the economy and state of the RV industry.
At the same hearing, Fleetwood informed the judge that a deal to sell its Douglas, Ga., plant had fallen through because the buyer couldn’t get financing.
Businesses in Decatur, Ind., are receiving a much-needed economic boost thanks to hundreds of RV enthusiasts.
Hundreds of RV owners have returned to the birthplace of their home on wheels, Fleetwood RV in Decatur, according to the Indiana News Center, Fort Wayne.
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Rally organizers say the annual gathering is more important this year, because of Fleetwood Enterprises Inc.’s economic troubles.
Hundreds of Fleetwood employees have recently had their hours cut, or lost their job when Fleetwood filed for bankruptcy in March.
The gathering is a good opportunity for Fleetwood officials to show the latest RV accessories, in hopes of making additional sales.
Coach owners say they want to give back to the struggling town that made their rolling home.
“This is our third trip down here and so we got to spend a lot of time getting to know the community and just showing them that we are actually coming back home,” rally organizer Marcia Bratsburg said.
Fleetwood officials say despite a 50% loss in sales, inventory is coming into line and the desire to buy an RV is still there, the trick is finding a bank that will lend the money.
“Customers are still using RVs,” said Fleetwood Director of Sales Justin Humphreys. “They still want to see the country. And at times we kinda get upset because there’s not a lot of business out there but I think it’s a great sign for business. The customers are out there using them. They want to go out and use their motor home and eventually they’re going to want a new one and that’s what we’re really excited about, is to build some new ones for them.”
But they will have to make RVs under a new owner. A U.S. bankruptcy court gave Fleetwood officials the green light to sell their motorhome assets.
American Industrial Partners will pay $53 million for assets including several facilities and service centers.
An RV rally in Decatur, Ind., is raising support to keep Fleetwood Enterprises Inc.’s operations there. It comes just weeks after a New York company bought the bankrupt RV maker. Now, the future of Decatur’s plant is up in the air.
This week, nearly one hundred RVs in town for a special rally could help turn things around, according to WANE-TV, Fort Wayne.
The motorhomes come from all over, in different sizes and colors but with one very important thing in common: they were all made by Fleetwood.
“This is where all the motorhomes that people have purchased were built at, here at Plant 44 in Decatur, Ind.,” explained Randy Hendricks, Fleetwood rally coordinator.
And, in the parking lot of Bellmont High School is where you’ll find all those American Coaches.
Ninety-seven have come to town for a special “Coming Back Home Rally.” It’s one of the annual events held by the American Coach Chapter of the Family Motor Coach Association (FMCA).
Every year dozens of RV owners take part in event just like the rally for a little fun and fellowship, but this year, the rally in Decatur also has a special purpose.
“We want Fleetwood to stay and we want to show Decatur how much they mean to us,” Marcia Bratsburg, eastern director of the American Coach Chapter told NewsChannel 15.
After a turbulent year of layoffs and filing for bankruptcy for the company, rally organizers hope the event is also a lifeline for Fleetwood.
Last year, Fleetwood cut 550 of its 600 workers. In March, it filed for bankruptcy.
The struggling RV maker was recently bought by a New York company, American Industrial Partners, and it’s not clear how the purchase will affect the Decatur plant.
Decatur Mayor John Schultz is optimistic the showing of support might convince the new buyers to keep Fleetwood operations right where they are.
“I hope that will have an impact; hopefully, it give us a heads up on any other competition that we’re up against,” explained Schultz.
The RVs will be gone when the rally ends on Saturday (July 18); but just a few days after that, Schultz is hoping for an announcement that Fleetwood won’t be leaving.
City leaders also recently granted Fleetwood a tax abatement to further encourage the company to keep its operations in Decatur.
The principals of Fleetwood Enterprises Inc. and the buyer for its motorhome division, American Industrial Partners (AIP), each commented this afternoon on the bankruptcy court’s approval on Wednesday (June 24) to sell the division to AIP.
The sale of Fleetwood’s motorhome assets to AIP for $53 million is subject to pre-closing conditions and post-closing adjustments, according to a news release. Fleetwood did not conduct an auction because no other qualified bids were received.
“Fleetwood’s motorhome brands are highly respected, and we are confident that this market will recover with the broader economy,” said Dino Cusumano, partner of AIP. “We look forward to continuing to manufacture Fleetwood motorhomes. Fleetwood’s dealers and customers should see no change in Fleetwood motorhomes’ commitment to high quality industry-leading product. We greatly value the relationships that Fleetwood has with its dealers, customers and suppliers and very much look forward to continuing and improving those relationships going forward.”
Elden L. Smith, Fleetwood president and CEO, stated that management, “is pleased to see that the Fleetwood name will be preserved in the RV market place with this sale to AIP. The Fleetwood motorhome group will benefit greatly from having ownership that is well capitalized, experienced, and committed to growth in the RV industry. We are now focused on making this a smooth transition for our dealers, Fleetwood motor home owners, and associates.”
The sale includes two motorhome manufacturing facilities, two motorhome service facilities, and Fleetwood’s Gold Shield supply subsidiary, all presently located in Decatur, Ind. It also includes the intellectual property for Fleetwood’s existing motorhome brands and certain machinery and equipment in Riverside, Calif. AIP may operate the Riverside facility for an undetermined period of time going forward. AIP has agreed to assume certain liabilities, including warranty obligations on Fleetwood motorized products.
The companies expect the deal to close within a matter of weeks.
Additional information about the company’s reorganization may be found online in the news section of www.fleetwood.com or at www.kccllc.net/fleetwood.
American Industrial Partners was founded in 1989 and is a leading U.S. based private equity firm that makes control equity investments, in partnership with management, in well positioned U.S. headquartered industrial companies with leading market shares that can benefit from the firm’s systematic approach to implementing strategic and operational improvements. It is investing its fourth fund which recently closed with $405.5 million of committed capital. For more information, visit www.aipartners.com or American Industrial Partners can be reached at (212) 627-2360.
Founded in 1950, Fleetwood Enterprises Inc. and its various subsidiaries produce, distribute and service recreational vehicles and manufactured housing.
A $53 million sale of Fleetwood Enterprise Inc.’s RV division to a New York equity firm was approved Wednesday (June 24) in bankruptcy court in Riverside, Calif.
American Industrial Partners was the only firm to bid for Fleetwood’s RV division, according to the Riverside Press-Enterprise.
The deal is expected to close July 10.
American Industrial Partners agreed to buy Fleetwood’s intellectual property and RV brands in addition to two motorhome manufacturing plants, two motor home service centers and the company’s subsidiary Gold Shield supply, all located in Decatur, Ind.
Dino Cusumano, a partner with American Industrial Partners, cited a confidentiality agreement signed with Fleetwood and wouldn’t confirm or deny speculation that the RV manufacturing operations would be revived in Decatur and the company’s headquarters moved there.
Details of the deal regarding any possible leadership transitions from Fleetwood to American Industrial’s operations and what fate is in store for Fleetwood’s RV plant in Riverside, which wasn’t part of the sale, remained unclear.