Fleetwood Files Bankruptcy

On March 10, Fleetwood Enterprises Inc. announced it had filed voluntary Chapter 11
petitions for itself and certain operating subsidiaries in the U.S. Bankruptcy Court for
the Central District of California in Riverside. Fleetwood announced it will close its
travel trailer division and plans to sell its motorhome and manufactured-housing units, but
will continue to operate the latter two while the company seeks buyers for these business
units. Fleetwood Enterprises Inc. said in court papers that the filing will put a halt to
lawsuits pending against it, including lawsuits filed by Hurricane Katrina victims that are
set to go to trial in September. Fleetwood was one of several firms named in lawsuits filed
by people displaced from their homes after the storm and were provided with travel trailers
that the Federal Emergency Management Agency purchased. The suits claimed the companies
built trailers with materials containing formaldehyde. “Although we made substantial
progress in restructuring this division and improved the product offering, current market
conditions proved too severe to continue the turnaround,” stated Elden L. Smith,
Fleetwood’s president and chief executive officer. “We appreciate the past support of the
travel trailer dealers and our associates.” “We will use the Chapter 11 process to more
rapidly restructure our overhead, pursue potential buyers, and definitively resolve our
debt issues,” Smith said. “Fleetwood is one of the most widely recognized names in our
industries, with strong market share, an extensive dealer network and enthusiastic customer
support. As important as these assets are, we must take additional steps in response to
today’s deepening economic challenges.” Smith went on to say that “The RV industry has
sound long-term prospects, as RVers remain faithful to the lifestyle, and we anticipate a
strong rebound when the financing environment stabilizes and consumer confidence improves.
In our manufactured housing business, we see growth opportunities that arise from positive
demographic trends, the growing need for affordable housing in this country, and commercial
modular applications, particularly for the military which represents an important segment
of our market. We will be able to compete more effectively now that financing advantages of
site-built homes over manufactured homes have narrowed. We are taking steps to ensure our
businesses will be ready when the current markets turn up again.” The company is said to be
working with Bank of America to continue to provide RV dealer and consumer financing during
the reorganization period.