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RV Maker Fleetwood Enterprises Files For Chapter 11

Maker of recreational vehicles and manufactured housing has filed for voluntary Chapter 11 bankruptcy protection and will shutter its travel-trailer operations.

RIVERSIDE, Calif. (AP) -- Fleetwood Enterprises Inc., a maker of recreational vehicles and manufactured housing that has been restructuring for about three years, said Tuesday it has filed for voluntary Chapter 11 bankruptcy protection and will shutter its travel-trailer operations.

The 59-year-old company, which has been coping with slowing sales, filed petitions for itself and some U.S. operating subsidiaries in the U.S. Bankruptcy Court for the Central District of California in Riverside.

Fleetwood said it has already started closing its travel-trailer division, which employs about 675 people in three manufacturing facilities and two service facilities. The company said it is also laying off an additional 65 corporate associates.

The division accounted for losses of $16.8 million in 2008 and $65.3 million in 2007, Fleetwood said.

The company said its motor-home and manufactured-housing businesses will continue to operate while the company seeks buyers for the units.

Fleetwood has shed two noncore businesses and cut staff by more than 70 percent.

"Although we made substantial progress in restructuring this division and improved the product offering, current market conditions proved too severe to continue the turnaround," said President and Chief Executive Elden L. Smith in a statement.

"We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential buyers, and definitively resolve our debt issues," he added.

Smith said he expect the markets for RVs and manufactured housing to rebound once the financing environment and consumer confidence improve.

Fleetwood said it is in advanced talks with its senior secured lenders for debtor-in-possession financing to supplement its existing working capital.

Fleetwood has asked the Court to approve wage and benefit payments and the continuation of some sales programs, among other first day motions.

The company is working with its largest national lender, Bank of America, to continue to provide RV dealer and consumer financing.

As of Oct. 26, 2008, Fleetwood's consolidated balance sheet showed assets of $558.3 million and liabilities of $518 million.

Fleetwood's legal counsel is Gibson Dunn & Crutcher, its investment banker is Greenhill & Co. and its financial adviser is FTI Consulting.

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