Congoleum Announces Financing Extension, Plan Subm
Mercerville, NJ, December 22, 2005--Congoleum Corp., made several announcements regarding its financing arrangements, developments with respect to its plan of reorganization and the appointment of two new directors.
First, Congoleum reported that the Bankruptcy Court approved an amendment to Congoleum's debtor-in-possession credit facility at a hearing held on December 19, 2005. The amendment extended the maturity of that facility for a year, until December 31, 2006.
Second, Congoleum reported that active negotiations are underway with respect to the terms of a new plan of reorganization, which Congoleum expects to file with the Bankruptcy Court by February 3, 2006. In connection with these negotiations, Congoleum anticipates that the trustee for holders of its 8.625% notes due in August 2008 will ask that a committee of bondholders be formed to negotiate treatment of their claims under the new plan. The Bankruptcy Court has scheduled a hearing on April 13, 2006 to consider the adequacy of the plan disclosure statement.
Roger S. Marcus, chairman of the board, commented, "We are pleased that the various parties are engaged in negotiating resolution of the issues that have been obstacles to confirmation of previous plans. It now appears that achieving a consensual plan with the asbestos claimants is going to require concessions on the part of Congoleum's bondholders, as well as concessions on the part of Congoleum's shareholders. While we do not yet know the specific terms, it is clear that the interests of all parties will be best served by a plan that can be confirmed without delay and bring this very expensive process to an end. We hope to achieve that result during the second half of 2006."
Finally, Congoleum reported that Adam H. Slutsky and Jeffrey H. Coats were elected to its board of directors effective December 16, 2005. Mr. Slutsky will serve as a Class C director with a term expiring at Congoleum's 2008 annual meeting of shareholders, filling the vacancy created by the retirement of Cyril C. Baldwin, Jr., last month. Mr. Slutsky is CEO of Mimeo.com, an online document production company. He previously worked for AOL after it acquired Moviefone, an internet ticket company he founded. Mr. Coats will serve in a newly created Class A director position with a term expiring at Congoleum's 2006 annual meeting of shareholders. Mr. Coats is CEO, president and director of Mikronite Technologies Group Inc., an industrial technology company, and also serves as a director of Autobytel Inc. Prior to that, he was a founder and managing director of TH Lee Global Internet Managers, L.P., after serving in various positions, including managing director, at units of General Electric Capital Corporation. Both Mr. Slutsky and Mr. Coats will serve on the Audit Committee of Congoleum's board.
Mr. Marcus commented, "We consider ourselves very fortunate to have Adam Slutsky and Jeff Coats joining the board at this time. They each bring a wealth of talent and experience to complement that of the existing directors, and I look forward to their contributions as we move the business ahead."
