Trenton, NY, August 1, 2006--The committee of bondholders in the Congoleum Corp., bankruptcy has won court approval to set up a "screening wall" that will allow its member companies to trade the company's bonds while handling sensitive financial information.
The U.S. Bankruptcy Court in Trenton, N.J., on Monday signed off on the screening wall, which the bondholders said would isolate nonpublic information obtained by committee members from bond traders.
The "wall" requires trading committee members to take actions to keep committee and trading information separate. Employees who work on committee matters wouldn't be allowed to work on trading matters, files would be kept separate and special procedures for telephone messages would be established. In court papers filed last month, the bondholders committee said its members shouldn't be forced to choose between serving on the committee and risk "the loss of beneficial investment opportunities."
Congoleum, a subsidiary of American Biltrite Inc., filed for bankruptcy protection on Dec. 31, 2003. The company listed assets of $213 million and liabilities of $236 million as of Sept. 30, 2004. American Biltrite isn't in bankruptcy protection. With seven previous reorganization plans having failed, Congoleum will seek approval to send an eighth version to its creditors at a hearing next Monday in the Trenton bankruptcy court. The plan provides for the establishment of a trust, largely funded by insurance proceeds, to compensate asbestos-injury claimants.
