Armstrong Gets OK for Chap 11 Disclosure Statement

Lancaster, PA, June 2--Armstrong World Industries on Friday received bankruptcy-court approval of the disclosure statement outlining terms of its Chapter 11 reorganization plan. The company expects a hearing on the confirmation of its plan sometime in mid-November, said Armstrong spokesman Tom Burlington. The flooring and interior products company, which filed for Chapter 11 protection in 2000 to manage rising asbestos liabilities, has proposed a plan that would pay asbestos personal-injury claimants from a trust. The trust would receive consideration of about $1.8 billion, while unsecured creditors with claims against the company would split about $982 million under the plan. People who claim damage to their property from asbestos are to share $2 million. Armstrong World estimates the plan will provide unsecured creditors a recovery of about 59.5% of their allowed claims, recent Securities and Exchange Commission filings said. Existing stock in Armstrong World's parent company, Armstrong Holdings Inc. (ACKHQ), would be canceled under the plan, but those shareholders would be eligible to receive warrants for stock in the reorganized Armstrong World, the filing said. Armstrong Holdings would then be dissolved.