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Palm Harbor Homes Files Liquidation Plan

August 10, 2011 by   - () Leave a Comment

Palm Harbor Homes Inc., a U.S. builder of factory-made houses, filed a liquidation plan supported by unsecured creditors who would receive a recovery of as much as 21%, Bloomberg news reported.

Palm Harbor won court approval in March to sell virtually all of its assets to a joint venture of Cavco Industries Inc. and Third Avenue Value Fund for about $85.3 million. Most of those assets were sold to Cavco and the fund in mid-June.

“The primary purpose of the plan is to provide for the orderly liquidation and distribution of the assets,” the company said in its disclosure statement, a description of the plan filed Aug. 5 in U.S. Bankruptcy Court in Wilmington, Del. The plan gives creditors “the best recoveries possible,” Palm Harbor said.

The homebuilder, based in Addison, Texas, sought bankruptcy protection Nov. 29, listing assets of $321.3 million and debt of $280.3 million as of Oct. 29.

Under the plan, a trust would be created to distribute cash and liquidate any remaining assets, court papers show. Holders of 3.25% senior notes, owed about $54.8 million, and general unsecured creditors would get as much as 21% on their claims.

Holders of Palm Harbor stock, which traded at $2.15 a share a year ago, wouldn’t receive any recovery.

The company scheduled a Sept. 13 hearing to seek court approval of the disclosure statement.

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