Congoleum Discusses Insurance Decision

Mercerville, NJ, May 23, 2007--Congoleum Corp. reported that a court decision was issued in Phase I of the trial addressing disputes regarding insurance coverage for asbestos liabilities. The decision found that Congoleum's insurers were not obligated to provide coverage for the settlement agreement covering numerous claimants with asbestos claims against Congoleum. The settlement had been reached in 2003, prior to Congoleum's Chapter 11 filing.

Roger S. Marcus, Chairman of the Board, commented, "The judge presiding over our reorganization proceedings has already made it clear that she would not confirm a plan that honored the terms of the settlement agreement addressed by this state court decision. This decision further confirms the issues created by that agreement, and provides additional guidance on the steps we can take to comply with the bankruptcy court's rulings and decisions. We are proceeding with those steps so we can move ahead with a plan that complies with all necessary legal requirements and enables us to complete our reorganization."

Marcus concluded by saying "In addition to resolving the issues posed by the settlement agreement, we are also in active mediation discussions to reach agreement on other terms of our next reorganization plan. I believe we are making progress, and hope we will have a new plan filed with the bankruptcy court later this year."

On December 31, 2003, Congoleum Corporation filed a voluntary petition with the United States Bankruptcy Court for the District of New Jersey (Case No. 03-51524) seeking relief under Chapter 11 of the United States Bankruptcy Code as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago.