Palm Harbor 30X Volume Alert (PHHM, CVCO)

Posted in General 
November 29th, 2010

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.


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