Congoleum Reorganization Plan Finally Approved
Mercerville, NJ, June 9, 2010--Congoleum said that its reorganization plan has been approved by the District Court of New Jersey and that the company should emerge from bankruptcy soon.
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"I am absolutely elated to see Congoleum's plan confirmed at last," said Chairman Roger S. Marcus
"It has been a long, difficult journey out of the complicated asbestos and insurance litigation we faced nearly nine years ago. I could not be happier about putting this chapter of our history behind us."
"Consummation of our reorganization requires various transactions such as closing on our new financing arrangements. While we have been working on these steps, we could not complete them until the confirmation order was entered. We expect to complete these remaining steps and emerge from bankruptcy shortly."
The plan gives ownership of the company to noteholders and people seeking compensation for illnesses associated with the company's asbestos-laden floor tiles.
Congoleum sought Chapter 11 protection Dec. 31, 2003, in Trenton, N.J., to deal with the thousands of lawsuits brought by people seeking compensation for illnesses they said they'd suffered as a result of their exposure to Congoleum's asbestos-laden floor tiles.
The company will give 50.1% of the stock in the reorganized Congoleum to a trust set up for the benefit of holders of asbestos personal injury claims. The trust will also get approximately $235 million from court-approved asbestos insurance settlement agreements. And the trust will get rights to additional asbestos coverage not the subject of any settlement.
The remaining stock in the reorganized company will go to holders of senior note claims. And the reorganized Congoleum will issue $33 million in new notes to noteholders.