Letters to Customers — Retailers and Builders
November 17, 2009
Dear Customer,
We are pleased to report that during first-day hearings today in our voluntary Chapter 11 case, the Court approved our request to continue to honor our normal business commitments such as customer warranties and service obligations, promotional programs, customer and engineering deposits and the like, consistent with our current practices.
In addition, we received court approval to use up to approximately $31 million of our $40 million debtor-in-possession (DIP) facility on an interim basis pursuant to the terms of the facility. This interim financing gives the Company the liquidity and resources to continue to purchase goods and services and fund operations. The final hearing on use of the entire DIP facility is scheduled for Thursday, December 10, 2009.
A copy of our public announcement is enclosed. The Company filed its voluntary petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The cases are being jointly administered under case number 09-14019.
We will continue to keep you informed as to the progress of our reorganization. We thank you for your continued support and trust that, going forward, we can continue to build on our working relationship to create long-term opportunities for our mutual success.
If you have any additional questions, please feel free to call our restructuring information line at (877) 857-7554 or (248)-614-8390 if you are calling from outside the United States or visit the Company’s restructuring website at www.championrestructures.com.
Sincerely,
William C. Griffiths
Chairman, President and Chief Executive Officer
Champion Enterprises, Inc.
November 15, 2009
Dear Customer,
As you may have already heard, Champion Enterprises, Inc. made a very important announcement today. I wanted to take this opportunity to share some perspective about the announcement with you.
The Company has operated for many years with a significant debt load that has become increasingly burdensome as the financial and housing markets declined during this difficult economic environment. As a result, the Company filed for relief under Chapter 11 of the U.S. Bankruptcy Code to improve its capital structure and to facilitate a sale and recapitalization in order to further strengthen its competitive position. Our operations in Canada and the United Kingdom were not included in the filing. The Company expects that this restructuring will be accomplished through a court-supervised sale of its operations. Champion’s restructuring is for the purpose of fixing its balance sheet, not its operations. As a result, we do not anticipate any plant closures or other changes to our daily operations as a result of the filing.
The Chapter 11 process provides Champion with the most timely and orderly means to restructure its debt obligations so we can be best positioned to capitalize on the considerable opportunities in the factory-built construction industry as they arise in the future. We fully expect to complete this restructuring swiftly and continue designing and manufacturing high quality products for our customers. In other words it will be business as usual.
During our restructuring and beyond Champion will continue to:
- Professionally design, engineer and manufacture our products using skilled craftsmen in our controlled factory environment to meet appropriate national, state and local building codes.
- Maintain our rigorous quality standards by using only high quality building materials and components.
Champion has requested Court authority to continue to honor our normal business commitments, such as customer deposits, warranty programs and service obligations, promotional programs and the like. These are routine requests and we expect the Court to grant us this authority later this week.
In addition, we have obrained a $40 million loan from certain of our lenders. Once approved by the Court, the financing will be available to ensure that we remain able to fulfill our obligations to our customers, employees, trade partners and vendors. We can and will continue paying for the day-to-day goods and services we need to continue providing you high quality manufactured and modular homes.
Because you are so vital to our success, I want to assure you that our financial restructuring is not intended to affect our relationship with you in any way. Nor should it cause you to lose confidence in the proud company that stands behind the products that you sell to your customers.
Be assured that we will continue to keep you fully informed of developments relating to our reorganization progress. We are optimistic that we can complete this process quickly and with little to no impact on our daily operations. In the meantime if you have any questions please feel free to contact me or to call our dedicated restructuring information line at 877-857-7554, or 248-614-8390 if you are calling from outside the United States. We also have additional information on our restructuring website, www.championrestructures.com.
Sincerely,
William C. Griffiths
Chairman, President and Chief Executive Officer
Champion Enterprises, Inc.