Bankruptcy Court Approves Sale of Assets of Palm Harbor Homes, Inc. to Wholly Owned Subsidiary of Cavco Industries, Inc.
DALLAS (March 7, 2011) – Palm Harbor Homes, Inc. (OTC:PHHMQ.PK) announced today that the U.S. Bankruptcy Court approved a subsidiary of Cavco as the successful bidder for the assets of Palm Harbor at an auction conducted under section 363 of the United States Bankruptcy Code.
A newly-formed subsidiary of Fleetwood Homes will purchase substantially all of Palm Harbor’s assets comprising its manufactured and modular housing construction and retail businesses and all of the outstanding stock of its insurance and finance subsidiaries, and will assume certain liabilities of Palm Harbor.
As previously reported, Palm Harbor and certain of its subsidiaries filed for chapter 11 bankruptcy protection on November 29, 2010. Shortly thereafter, Fleetwood Homes provided a $50 million debtor-in-possession credit facility to Palm Harbor. On March 1, 2011, Fleetwood Homes’ subsidiary was selected as the successful bidder in the court auction with a winning bid of $83.9 million, subject to certain post-closing adjustments and customary conditions to closing. At the close of the asset purchase transaction, the then-outstanding balance of the credit facility, including accrued interest, will be credited to the purchase price, thus reducing the amount of cash consideration to be transferred at the close of the transactions contemplated by the purchase agreement.
The successful bid included manufactured housing factories, retail locations, equipment, accounts receivable, inventory, intellectual property, and certain warranty and other liabilities. Palm Harbor’s insurance and finance subsidiaries, including Standard Casualty Company, Standard Insurance Agency, CountryPlace Acceptance Corp., and CountryPlace Mortgage, Ltd. were not parties to the Palm Harbor bankruptcy filing, but the shares of these companies are included in the assets to be acquired by Fleetwood Homes’ subsidiary.
About Palm Harbor Homes, Inc.
Palm Harbor Homes is one of the nation's leading manufacturers and marketers of multi-section manufactured homes. The Company markets nationwide through vertically integrated operations, encompassing manufacturing, marketing, financing and insurance. For more information on the Company, please visit www.palmharbor.com.
This press release contains projections and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the Company's current views with respect to future events and financial performance. No assurance can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. A discussion of these factors is included in the Company's periodic reports filed with the Securities and Exchange Commission.