CONGOLEUM CORP NEW (U-CGMC) - News Release
Congoleum Corporation Announces Filing of Third Joint Amended Plan of Reorganization
2010-02-12 17:10 ET - News Release
MERCERVILLE, NJ -- (MARKET WIRE) -- 02/12/10
Congoleum Corporation (PINKSHEETS: CGMCQ) reported today that it has filed a modified plan and disclosure statement with the US District Court. The plan was filed jointly with the official asbestos claimants' committee, the official committee of bondholders and the futures representative. A hearing on the disclosure statement and plan voting procedures has been scheduled for March 12, 2010. Terms of the plan are substantially similar to those of the previous reorganization plan filed on October 22, 2009.
As recently announced, Congoleum has reached a $100 million settlement with nine insurance groups and the New Jersey insurance guaranty associations, and a hearing to approve that settlement is scheduled for February 19, 2010. A settlement with another insurer for $2.1 million has been reached and will also be heard on that date. Congoleum will additionally be seeking approval of the $25 million settlement it reached in 2006 with Travelers. A further twelve insurance settlements totaling $82 million are in force and have already received court approval. Net proceeds from these settlements are payable to the plan trust that will be formed for asbestos claimants after a plan becomes effective. In the event the Court approves the settlements being heard February 19, 2010, only one insurer, Chartis (formerly known as AIG), remains unsettled because a prior settlement agreement has been declared expired.
Roger S. Marcus, Chairman of the Board, commented, "We are pleased that the futures representative has added his official support to the plan and that a hearing date has been set for our disclosure statement. It also marks tremendous progress to have only one unsettled insurer. Negotiations to modify their agreement are underway."
Mr. Marcus continued, "The District Court entered an order this week scheduling our confirmation hearing for May 25, 2010 and we are fully committed to emerging from bankruptcy in the second quarter of this year."
Copies of the modified plan and disclosure statement will be filed by Congoleum with the Securities and Exchange Commission as exhibits to a filing under the Securities Exchange Act of 1934. They will also be available on the investor relations section of Congoleum's website at www.congoleum.com.
Congoleum Corporation is a leading manufacturer of resilient flooring, serving both residential and commercial markets. Its sheet, tile and plank products are available in a wide variety of designs and colors, and are used in remodeling, manufactured housing, new construction and commercial applications. The Congoleum brand name is recognized and trusted by consumers as representing a company that has been supplying attractive and durable flooring products for over a century.
The above news release contains certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks, uncertainties and assumptions. These statements can be identified by the use of the words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project" and other words of similar meaning. In particular, these include statements relating to intentions, beliefs or current expectations concerning, among other things, future performance, results of operations, the outcome of contingencies such as bankruptcy and other legal proceedings, and financial conditions. These statements do not relate strictly to historical or current facts. These forward-looking statements are based on Congoleum's expectations, as of the date of this release, of future events, and Congoleum undertakes no obligation to update any of these forward-looking statements.
Although Congoleum believes that these expectations are based on reasonable assumptions, within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. Readers are cautioned not to place undue reliance on any forward-looking statements. Any or all of these statements may turn out to be incorrect. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements made in this press release speak only as of the date of such statement. It is not possible to predict or identify all factors that could potentially cause actual results to differ materially from expected and historical results. Factors that could cause actual results to differ from expectations include: (i) the future cost and timing of estimated asbestos liabilities and payments, (ii) the availability of insurance coverage and reimbursement from insurance companies that underwrote the applicable insurance policies for the Company for asbestos-related claims, (iii) the costs relating to the execution and implementation of any plan of reorganization pursued by Congoleum, (iv) timely reaching agreement with other creditors, or classes of creditors, that exist or may emerge, (v) satisfaction of the conditions and obligations under Congoleum's outstanding debt instruments, (vi) the response from time to time of Congoleum's and its controlling shareholder's, American Biltrite Inc.'s, lenders, customers, suppliers and other constituencies to the ongoing process arising from Congoleum's strategy to settle its asbestos liability, (vii) Congoleum's ability to maintain debtor-in-possession financing sufficient to provide it with funding that may be needed during the pendency of its Chapter 11 case and to obtain exit financing sufficient to provide it with funding that may be needed for its operations after emerging from the bankruptcy process, in each case, on reasonable terms, (viii) timely obtaining sufficient creditor and court approval of any reorganization plan pursued by Congoleum (including the results of any relevant appeals), (ix) compliance with the United States Bankruptcy Code, including Section 524(g), (x) costs of, developments in, and the outcome of insurance coverage litigation pending in New Jersey state court involving Congoleum and certain insurers, (xi) the possible adoption of another party's plan of reorganization which may prove to be unfeasible, (xii) increases in raw material and energy prices or disruption in supply, (xiii) increased competitive activity from companies in the flooring industry, some of which have greater resources and broader distribution channels than Congoleum, (xiv) increases in the costs of environmental compliance and remediation or the exhaustion of insurance coverage for such expenses, (xv) unfavorable developments in the national economy or in the housing industry in general, including developments arising from the war in Iraq and Afghanistan and from the tightening of credit availability, (xvi) shipment delays, depletion of inventory and increased production costs resulting from unforeseen disruptions of operations at any of Congoleum's facilities or distributors, (xvii) product warranty costs, (xviii) changes in distributors of Congoleum's products, and (xix) Congoleum's interests may not be the same as its controlling shareholder, American Biltrite Inc. In any event, if Congoleum is not successful in obtaining sufficient creditor and court approval of a plan of reorganization, such failure would have a material adverse effect upon its business, results of operations and financial condition. In the event that the modified plan is confirmed and becomes effective holders of existing common shares of Congoleum will receive nothing on account of their interests and their shares will be cancelled. Actual results could differ significantly as a result of these and other factors discussed in Congoleum's annual report on Form 10-K for the year ended December 31, 2008 and subsequent filings made by Congoleum with the Securities and Exchange Commission.
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