Congoleum Reports Production Line Incident, Agrees
Merverville, NJ, August 23, 2006--Congoleum Corp., said that one of the sheet flooring production lines at its Marcus Hook, Pennsylvania plant sustained extensive damage last Friday. The company also said it has reached a settlement agreement with another of its excess insurance carriers over coverage for asbestos-related claims.
Congoleum said there were no injuries at the Marcus Hook facility and the damage was limited to the components of the production line in the area of the incident.
The company said it expects it will be able to replace the capacity of the damaged line through a combination of available overtime capacity on the other production line at the Marcus Hook plant and outsourcing.
Work on replacing the damaged line has already commenced, and repairs are expected to be completed during the last quarter of 2006.
Roger S. Marcus, chairman of the board, commented "We believe our contingency plan will permit us to service our customers without any serious or long term disruption, and expect our property and business interruption insurance coverage will minimize the costs resulting from the incident, including the burden of replacing the production capacity. I am encouraged by the responsiveness of both the manufacturer of our equipment and our insurance carrier. I believe their support will expedite the repair of the damaged line. Finally, I am very grateful that no one was hurt and proud of our employees' responsiveness to the incident."
The company said it has reached a settlement agreement with another of its excess insurance carriers over coverage for asbestos-related claims. It has entered into a settlement agreement with Century Indemnity Company and its affiliates. It said the agreement is subject to various requirements set forth in the settlement agreement.
Century will pay $16.95 million to the Plan Trust. A motion for Bankruptcy Court approval of this settlement is pending.
Marcus said, "We believe this settlement is a major step forward. Given the very active role Century has played in opposing our reorganization efforts and litigating coverage issues, we are quite pleased to have resolved our differences. We are also pleased that the Asbestos Claimants Committee and the Future Claimants' Representative are supporting this settlement. We have now reached over $207 million in insurance settlements, and negotiations will continue with other carriers. The disclosure statement hearing for our recently filed reorganization plan is scheduled for September 21, 2006 and a positive result there could further add to the momentum of settlements. We remain hopeful that we can see our plan confirmed in the first quarter 2007."
