Oakwood Homes to File For Bankruptcy
11/16/2002 11:59:35 EST
siliconinvestor.com
GREENSBORO, N.C. (AP) - Oakwood Homes, the nation's No. 2 retailer of manufactured homes, says it will file for Chapter 11 bankruptcy protection and cut 1,700 jobs - about a fifth of its workforce.
The company, which also builds mobile homes, is facing $570 million in debt and has been losing money for the past three years.
"This was inevitable," said Myles Standish, Oakwood's chief executive. Under a reorganization plan proposed by the Greensboro-based company, bondholders would forgive the debt in exchange for all of the company's stock.
In its announcement Friday, Oakwood said it would close five plants, in North Carolina, Texas, Tennessee and Georgia, as well as 75 retail locations, most of them in Tennessee and Texas. The move will leave Oakwood with about 120 retail outlets.
The company makes loans to the consumers who buy its manufactured houses. As the economy has soured, Oakwood's mostly blue-collar customers have defaulted on those loans in increasing numbers, Standish said.
Oakwood's stock traded at 50 cents before Oakwood suspended trading Friday, down from more than $8 earlier this year. The New York Stock Exchange is set to consider delisting Oakwood shares. |
