Fedders Bankruptcy Case Files in Delaware
Fedders North America, Inc. and sixteen affiliated debtors, including its parent company, the Fedders Corporation filed petitions under Chapter 11 of the Bankruptcy Code in Delaware earlier today. Judge Brendan Linehan Shannon will preside over these cases.
Probably best known for its popular lines of air conditioners, Fedders is over a century old, and, since 1999, has manufactured a wide range of air treatment products for residential, commercial and industrial markets.
According to the first day declaration filed in these cases, the decision to enter into bankruptcy was precipitated by factors that include (i) lower sales of room air conditioners due to planned reductions in sales volume to the Home Depot, (ii) national slowdowns in residential construction, (iii) changes in government-mandated HVAC standards that caused distributors to purchase large amounts of product under former standards, and depressing sales of products manufactured to comply with new standards, (iv) limited capital liquidity in early 2007, and (v) a decline in first quarter shipments because of a warmer-than-normal winter.
The first day declaration further reveals that the debtors plan to explore the possibility of a sale of their businesses, and, dependent upon the success of such sales, they will consider a plan of reorganization based on the remainder of its businesses.
