Letter to UK Suppliers
November 15, 2009
Dear Business Partner:
Because of our long standing relationship, I wanted to tell you about important steps that our parent company in the United States, Champion Enterprises, Inc. has taken to improve its capital structure.
Today Champion and its U.S.A. based operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company’s operations in the United Kingdom and Canada were not included in and will not be impacted by the filing. The Company expects that this restructuring will be accomplished through a court-supervised sale of its operations. For your information, a copy of Champion’s public announcement regarding its restructuring activities is enclosed.
It will be business as usual for Caledonian during this process. There will be no change in management. All employees will be paid, vendors and service providers will be paid, and customer needs will be met – without any interruption whatsoever. In other words, there will be no change in our business relationship, and we will continue to pay you for goods and services in the normal course of business.
Chapter 11 is a commonly used business tool in the U.S. that provides companies with “breathing room” so that they can work out their financial issues without the burden of near-term debt. Many well known companies, including GM, Chrysler and Remy International have successfully emerged from Chapter 11 and have continued to operate successfully. Champion’s restructuring is for the purpose of fixing its balance sheet not its operations, as market conditions in the U.S. have caused its debt load to become overly burdensome. We expect our parent company to emerge from this restructuring as a stronger company, well positioned to continue its long-term track record of success both in the United States and abroad.
It is important to emphasise that Champion has not “gone bankrupt” (the Company has filed a Chapter 11 proceeding), nor is the Company going out of business. While Champion Enterprises, Inc. completes the restructuring, its daily operations in every market it serves will continue as they always have. The restructuring will have no impact on the day-to-day operations of Caledonian. We will continue to fulfill our commitment to customers and to serve their ongoing needs without delay or disruption.
If you have any questions, please feel free to contact me, Paul Hudson or Lee Braithwaite. There is also additional information on Champion’s restructuring website, www.championrestructures.com.
On behalf of our entire management team, I’d like to thank you for your continued support.
Sincerely,
David Turnbull
Managing Director
Caledonian Building Systems Limited