Champion Enterprises Files Bankruptcy
November 16, 2009
On November 15, 2009, Champion Enterprises and 17 related United States entities filed Chapter 11 bankruptcies in the United States Bankruptcy Court for the District of Delaware.
Champion is an international manufacturer of factory-built homes and modular buildings. According to the filed Declaration of its Chief Financial Officer Phyllis Knight, Champion intends at present to market its United States businesses for sale “in whole or in part.” Champion also intends, during this period, “to continue to operate their business in the ordinary course and work to maximize the value of their assets for the benefit of creditors.”
In connection with its attempt to keep operating, on November 17th Champion obtained a bankruptcy court order allowing it to begin accessing additional financing from its lenders. The bankruptcy court also let Champion continue honoring various customer programs, including its HUD obligations, its warranty programs, and its dealer Volume Incentives. Finally, Champion was authorized to honor its customer deposits.
The bankruptcy court, however, imposed limits on the amount of money that Champion could spend for its customer programs or for customer deposits. Accordingly, persons holding claims against Champion under these programs, or for customer deposits, are urged to proceed rapidly to enforce their rights.
The Champion bankruptcies are brand new and subject to rapid development. If you have a financial stake in what happens to Champion, you need to consider how to protect your rights.
This Scarinci Hollenbeck Legal Update has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel.