Failed Company Paper: Champion Enterprise

1739 words - 7 pages

Company Description
Champion Enterprises Inc. is one of the leaders in the manufactured home building industry. The company specializes in factory manufactured housing and building materials, specializing in two-story homes, multi-section homes, ranch-style homes, single-style homes, Cape Cod style homes, townhouses, duplexes, and triplexes. Modular homes maintenance cost is lower than traditional homes making them a better option.
Champion Enterprises traded on the New York Stock Exchange under the ticker symbol CHB. The company which was founded 56 years ago declared Chapter 11 bankruptcy in 2010. Before filing Chapter 11 the company was the highest producer of homes in the industry while doing operations out of various plants in North America and Europe. Champion Enterprise is a parent company of numerous subsidies in the manufactured home industry.
I decided to take on investment in the company, which at the time was stalling, in hopes of getting a return on investment. I sold my shares 02/07/2011 at a loss because the company did not seem to have things in order. I originally acquired 9 shares on 08/14/09 and 91 shares on 10/07/09. The average price per share (total cost divided by total shares) when I purchased the stocks was $0.45 and on the date of sell my shares they were worth $0.02 per share. The company was excellent at providing information to its investors as decisions were made during the years of operations; however there is limited information on the company since the bankruptcy .

Future Outlook
The future for Champion Enterprise is extremely optimisticoptimistic; with some major changes the company can once again be successful.. The reason the company filed for bankruptcy was to take care of its debt issues. In 2006 the company named a new CEO, CFO and has begun to determine how to reemerge the company. Despite, the CEO and CFO’s inability to reemerge the company, a new leadership team can help the company see success in the near future. The housing industry during the recession took a downturn, thus effecting companies such as Champion Enterprise. In the future it is incredibly likely that as the housing market stabilizes the company will emerge from its bankruptcy status. It is likely that the company can remain dormant for 2 years before reemerging in the industry, because there will always be a need for modular homes.
Why It Failed
The company failed because operations market disinterest have gotten so bad for the company that it had to file for Chapter 11 bankruptcy. Chapter 11 bankruptcy refers to the process which permits a business to reorganize under the United States Bankruptcy laws. Therefore, while this company has temporarily failed the bankruptcy laws will permit it to reform sometime the near future. The filing for Chapter 11 is often due to the companies’ ability to service its debt or pay it creditors, which is precisely the case with Champion Enterprise.
The reason that Champion Enterprise...

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