Palm Harbor Homes Inc. (NASDAQ: PHHM) is one of the rare exceptions of what happens when companies file for bankruptcy protection under Chapter 11. The company announced by press release that it and 5 subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The company has partnered with Fleetwood Homes, Inc., a subsidiary of Cavco Industries, Inc. (NASDAQ: CVCO) through a sale process.
In conjunction with the filing, Palm Harbor has received a commitment of $50 million. The $50 million may increase to $55 million if certain conditions are met, for a debtor-in-possession credit facility from Fleetwood Homes that will be used to extinguish all obligations due on the existing Textron Financial Corporation facility and fund post-petition operations, commitments to customers, and employee obligations.
Palm Harbor Homes is seeing shares up 79% at $0.26 on more than 7.1 million shares. With an average of just under 200,000 shares per day, this is about 35-times normal volume.
More details of this are available at its press release.
JON C. OGG