Mercerville, NJ, April 22--Congoleum said it has reached an agreement in principle with representatives of the Asbestos Claimants' Committee and the Future Claimants' Representative to make certain modifications to its proposed plan of reorganization and related documents governing the settlement and payment of asbestos related claims against Congoleum.
Under the agreed-upon modifications, asbestos claimants with claims settled under Congoleum's pre-petition settlement agreement would agree to forego the security interest they were granted and share on a pari passu basis with all other present and future asbestos claimants in insurance proceeds and other assets of the trust to be formed to pay asbestos claims against Congoleum.
As a result of these changes, Congoleum will be preparing an amended plan and disclosure statement and soliciting acceptances from certain claimant creditors affected by these modifications. There can be no assurance that the amended plan will receive the affirmative vote of the requisite majorities. Congoleum has requested an adjournment of the hearing presently underway to consider confirmation of its existing plan of reorganization.
The amended plan and disclosure statement modifications and solicitation procedures will be subject to court approval.
Roger S. Marcus, Chairman of the Board, commented, "We consider this another positive step forward. We have renegotiated certain important aspects of our plan of reorganization and related documents in light of developments in other asbestos bankruptcy proceedings as well as objections raised concerning our current proposed plan. Our hope is that by addressing these concerns and following judicial guidance from other asbestos reorganization cases, the process of obtaining and sustaining the confirmation of our amended plan will ultimately take less time and cost less money, and the risk of an unfavorable outcome will be reduced. While these changes will delay the start of our confirmation process, we believe they will ultimately shorten the time it will take to get the asbestos problem completely behind us. We are hopeful that we can accomplish that by the end of 2005."
