After 7 1/2 hours of "spirited bidding" Fleetwood Enterprises auctioned off another piece of its manufactured housing assets as part of its bankruptcy reorganization.
A partnership between Cavco Industries, a Phoenix-based builder of manufactured housing, park model homes, and vacation cabins, and Third Avenue Trust Value Fund, a private equity investor, outbid the larger Clayton Homes for some of Fleetwood's manufacturing assets. The partnership company, called FH Holdings, bid $21.8 million for the assets, plus another $4.8 million for an idled plant in Woodland, Calif. In buying the assets, Cavco also assumes liabilities, including liens of $27.1 million.
The auction netted Fleetwood about $3.8 million more than Cavco had offered earlier for the same assets before the auction. The bidding increased the sales price and netted the sale of the plant as well.
A judge for the U.S. Bankruptcy Court Central District of California was to approve the sale on Wed. Aug. 12.
Since the March 10 Chapter 11 bankruptcy, the Riverside, Calif.-based Fleetwood has been selling off its assets unrelated to its original recreational vehicle business.
Clayton Homes, a leading manufacturer of modular homes and manufactured HUD homes, bought Fleetwood’s Trendsetter military housing construction assets for $4.5 million last May.
In recent years, Fleetwood, which began business as a manufacturer of recreational vehicles and manufactured homes, has attempted to save itself from the slump in demand by diversifying into the modular home business through a subsidiary named Trendsetter Homes. The focus of Trendmaker was two-fold: Capitalize on the need for replacement housing in New Orleans in the aftermath of Katrina and to net military housing contracts.
The former never materialized at any high level, and the company shuttered the Georgia plant opened for that purpose. But it was successful in securing contracts with the military to build housing in Texas but its precarious financial situation left it unable to bond the military projects.
Under the sale agreement, Clayton took over the contracts to build barracks in Fort Sam Houston and Fort Bliss in Texas.
Teresa Burney is a senior editor with Builder and Big Builder magazines.