Congoleum Corp. has announced that the Bankruptcy Court has issued an interim financing order approving its debtor-in-possession revolving credit facility. The court also authorized Congoleum to pay its suppliers in the ordinary course of business for amounts owed on account of goods and services supplied prior to Congoleum's Dec. 31, 2003 bankruptcy filing. Congoleum is pursuing a pre-packaged bankruptcy proceeding as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago.
The debtor-in-possession credit facility is extended by Congress Financial and provides up to $30 million in revolving credit based upon advance formulas against inventory and receivables at a rate of three-quarters of a percent over prime. Terms of the facility are substantially similar to those of the revolving credit facility Congoleum had with Congress prior to the bankruptcy filing. A hearing on the final approval of the debtor-in-possession financing will be held on Feb. 2.