Congoleum Reorganization Plan Voting Deadline Exte
Mercerville, NJ, October 13, 2005--Congoleum Corporation announced today that the Bankruptcy Court granted Congoleum's motion requesting that the deadline for voting on its plan of reorganization be extended until December 14, 2005.
Congoleum has reached a new agreement in principle with representatives of certain secured asbestos claimants concerning treatment of their claims, and expects to prepare a revised plan and submit it to the Bankruptcy Court by October 24, 2005.
Congoleum intends to seek permission of the Bankruptcy Court to distribute a summary of the plan modifications promptly thereafter, so claimants may vote on the revised plan before the new deadline. A hearing date to consider confirmation of this modified plan of reorganization has not been set.
Congoleum also announced that it has filed a motion seeking Bankruptcy Court approval for a settlement agreement with Mt. McKinley Insurance Company and Everest Reinsurance Company. Under the terms of the settlement, Mt. McKinley and Everest will pay $21.5 million into an escrow account. The escrow agent will transfer the funds to the trust for asbestos claimants to be formed by Congoleum's plan once the plan goes effective and the Court approves the payment.
Roger S. Marcus, chairman of the board, commented, "A distribution priority issue arose among the asbestos claimants and modifications are being finalized to resolve them. We believe the proposed changes should allow us to move forward with the support necessary for confirmation of our plan. We do not expect a significant delay from these changes and remain hopeful that we can emerge from bankruptcy in the spring of 2006."
Mr. Marcus added "We continue to make progress obtaining insurance proceeds to fund the trust for claimants. Completed insurance settlements now total over $164 million, we have additional settlements being finalized, and we are in ongoing negotiations with other carriers."
Copies of the modified plan of reorganization and disclosure statement will be filed by Congoleum with the Securities and Exchange Commission as exhibits to a Form 8-K when they are available. They will also be available on the investor relations section of Congoleum's website at www.congoleum.com.
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.
