By Linda Lipp, Greater Fort Wayne Business Weekly
lindal@fwbusiness.com
Bankrupt Fleetwood Enterprises has found a potential buyer it expects will continue to operate its motor-home and recreational-vehicle supply businesses in Decatur.
In a motion filed with the central California bankruptcy court May 29, Fleetwood said it has signed an agreement to sell the assets of the businesses to American Industrial Partners Equity Capital Fund IV, a middle-market private-equity firm. Unless a higher bid is submitted before June 18, the assets will be sold at a June 22 bankruptcy court auction for $53 million, less a maximum of $18 million for the assumption of liabilities and warrant obligations on Fleetwood products.
At full force, Fleetwood employed about 1,500 people in Decatur. Most recent employment numbers put the current total at 443, and the company said those employees have only been working about half time for the last six months.
Fleetwood also has a housing plant in Garrett that employs about 80 workers. The company said June 2 it is continuing to pursue buyers for its manufactured-housing business.
Bankruptcy court documents note that there are no guarantees that AIP will preserve jobs in Decatur, but do provide for a process for AIP to interview current workers for employment after the sale.
As compared to other alternatives, the proposed sale of the RV business as a going concern will produce higher net cash proceeds than a piecemeal liquidation would produce, Fleetwood's motion for the sale argued.
"By enabling the RV business to continue to be operated as a going concern, the sale will preserve several hundred jobs that would otherwise likely be eliminated," the motion read.
"We will do whatever we can to retain those jobs and work with the new owner," Decatur Mayor John Shultz said June 3. Fleetwood has been an important employer in the community, "and it's important for the community that it continue."
The proposed sale will benefit customers by continuing warranty and service programs, Fleetwood's motion argued, and "maintaining the RV business as a going concern will avoid the adverse effect of a liquidation on RV dealers. The negative impact of a liquidation on inventory values and retail sales of existing Fleetwood products could push many dealers to the breaking point."
"AIP is a very capable and qualified organization," Elden Smith, Fleetwood's president and CEO, said in a statement announcing the sale. "Since the sale process under Chapter 11 enables other bidders to come forward, we cannot say for certain what the outcome will be. We do expect, however, that the final purchaser will seek to take advantage of the Fleetwood name and legacy, as well as endeavor to preserve as many jobs as possible."
Bankrupt Fleetwood Enterprises sold the assets of its Trendsetter military housing business for $4.5 million May 29 to CMH Manufacturing, a day after receiving bankruptcy court approval of the transaction. Trendsetter manufactures modular barracks for the U.S. military in two adjacent facilities located in Belton, Texas, south of Waco. It was expected that CMH will make conditional job offers to most of the unit's employees.
Based in Riverside, Calif., Fleetwood filed for Chapter 11 bankruptcy protection March 10 and immediately closed five travel-trailer manufacturing and service sites, including one in Edgerton, Ohio.