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.
Upon learning that 325 Country Coach International members were notified that their March owner’s rally was canceled, Lazydays RV Center Inc. has offered to hold a complimentary rally in its place.
In a press release, Lazydays said that the club’s registration fees of $50,000 weren’t being refunded. Country Coach, which has not been in operation since December and recently filed for bankruptcy, stated in a Jan. 28 announcement on its wesbite that it would be holding an East Coast rally in June to replace the March event.
The Lazydays rally will take place April 27-30 at the dealer’s “RallyPark” on the company’s site in Seffner, Fla. The event will also include breakfast, lunch and RV seminars daily as well as a farewell dinner and bingo tournament on the last night.
Additionally, Lazydays said it will provide emergency repairs and offer a special discounted labor rate to members requiring service work while at the rally.
“Soon after discovering this unfortunate situation, the employee partners of Lazydays felt compelled to provide these members an alternative rally experience,” said Pat Overby, Lazydays general sales manager.
Seffner, Fla.-based Lazydays RV Center Inc. dealer achieved 10.4% national market share in the class A diesel motor home category, according to Statistical Surveys Inc., an independent firm based in Grand Rapids, Mich., that tracks RV registrations.
Statistical Surveys recently announced retail sales performance for new RV registrations for calendar year 2008. During this time period, Lazydays gained national market share in each category that it represents; Class A diesel motorhome, Class A gas motorhome, Class C motorhome, travel trailer and fifth-wheel.
“I am very proud of our sales professionals and our entire company,” said CEO John Horton. “Having one out of every ten new diesel motorhomes in the United States sold by Lazydays is a result of the relationships we build with our customers and the industry leading products we offer them.
“We will continue growing our market share by maintaining our focus on making customers for life.”