Judge Removes Obstacle in Congoleum Case

Newark, NJ, May 12, 2010--Two lawyers for asbestos victims can keep the $2 million resilient flooring firm Congoleum Corp. paid them to help resolve tens of thousands of claims against the company shortly before it filed for bankruptcy, thanks to a judge's May 7 ruling, according to Law.com.

U.S. District Judge Joel Pisano in Newark, N.J., found no conflict by the lawyers, who he said were working "to negotiate a prepackaged plan of reorganization under which asbestos personal injury claimants would likely recover more than they would have if Congoleum had gone into a 'free fall' bankruptcy."

No plan has been confirmed even though the congoleum bankruptcy case has been pending since Dec. 31, 2003.

Part of what has been holding up the process is the dispute over the payments to the lawyers.

At the time Congoleum turned to them in November 2002 to discuss the feasibility of a prepackaged plan, its primary insurers' policies were exhausted and the Mercerville flooring manufacturer was litigating coverage with its excess carriers in state court.