Mercerville, NJ, Oct. 27-Congoleum Corp. today announced that it has finalized documents relating to its pre-packaged Chapter 11 plan of reorganization and mailed them to asbestos personal injury claimants and other parties.
The terms of the plan of reorganization were negotiated at length with representatives of a large number of current asbestos personal injury claimants and a representative for future asbestos personal injury claimants, all of whom approved the final documents.
Asbestos personal injury claimants, Congoleum's secured lender and its majority shareholder will receive ballots to vote on the plan, and Congoleum anticipates that it will receive the votes necessary to obtain the plan's approval. The deadline for submitting votes is December 19, 2003.
Congoleum expects to commence bankruptcy proceedings in late December and seek bankruptcy court confirmation of the plan as promptly as possible.
Under the terms of the plan, when confirmed, Congoleum will contribute certain insurance rights and a note for approximately $2.7 million (subject to a future revaluation) to a trust to be formed pursuant to the plan for the benefit of asbestos personal injury claimants, and all current and future asbestos claims against Congoleum will be channeled to the trust.
Under the terms of the plan, Congoleum's other creditors will be paid in full and its shareholders will maintain their equity holdings in Congoleum. To comply with statutory disclosure requirements, Congoleum's trade creditors, bondholders and minority shareholders will also receive documents describing the plan of reorganization, but will not be entitled to vote on the plan as it does not impair their interests.
Roger S. Marcus, Congoleum's chairman, commented, "We are extremely pleased to have reached this point in the process of resolving our asbestos liabilities. There have been a myriad of details and issues to be dealt with in finalizing negotiations and documentation of our reorganization plan and the trust that will provide funds for asbestos claimants.
Marcus commented, "Now that our solicitation has commenced, we expect to make our bankruptcy filing in late December. The amount of time it will then take the court to confirm our plan and permit us to emerge from bankruptcy is harder to predict, but I am hopeful that it could take as little as three to six months. The uncertainty of our past timetable has been difficult for our employees, suppliers, customers, and investors and I thank them for their patience and continued support. It is very encouraging that the formal legal process for putting the asbestos problem behind us is finally underway."
Copies of the plan and disclosure statement will soon be filed by Congoleum with the Securities and Exchange Commission as exhibits to a Form 8-K. They can also be obtained by visiting Congoleum's website at http://www.congoleum.com/investor_relations/investor_1.shtml.
