If the deal is approved by bankruptcy court, Fleetwood Homes Inc. of California has agreed to purchase the failing company. Palm Harbor made the deal with Fleetwood after the company experienced four years of falling sales. Despite the company’s efforts to “improve and scale back operations as prudent and restructuring…existing debt”, according to CEO Larry Keener, Palm Harbor soon realized that making this deal would be more financially sound than attempting to run the company any longer.
In the meantime Fleetwood Homes has agreed to give as much as $55 million in debtor-in-possession financing to Palm Harbor, after which a subsidiary of Fleetwood will bid for the company in Delaware bankruptcy court later this year. This will allow the company to resume designing and manufacturing products for existing retailers, developers, and builders.