Pinewood Mobile Homes, Inc.

This case presents a realistic situation in which a firm in financial distress attempts an out-of-court financial restructuring by means of a debt exchange. Pinewood Mobile Homes is a large manufacturer of prefabricated homes, producing one-story, ranch-style houses; two-story, single-section and Cape Cod modular homes; and townhomes, apartments and duplexes. The company has lost the ability to compete effectively in the market place because it borrowed and acquired aggressively prior to the housing market crash. In order to avoid filling for Chapter 11 bankruptcy, Pinewood Mobile Homes must receive consent form senior lenders, junior creditors, and shareholders for a comprehensive restructuring plan. This case is written for use in elective MBA courses in corporate restructuring or advanced corporate finance. It can also be used in upper-level undergraduate finance courses that cover financial restructuring and corporate valuation.