"We have addressed the issues": Congoleum proposes new plan
Under the terms of the plan, Congoleum would contribute 3.8 million shares to a trust along with $7.3 million cash and 50 percent interest accrued on the company's 8 5/8 percent senior notes. The trust would also be funded by proceeds from Congoleum's insurance policies, the company said.
Insurance settlements related to asbestos claims have reached $164 million to date, with further settlements pending, the company noted.
Congoleum's plan of reorganization would allow for interest accrued on the company's senior notes to be forgiven. In addition, the maturity date of the notes would be extended by three years, to August 2011.
The plan also calls for revisions to the proposed arrangements under which different groups of asbestos claimants would be paid, and the procedures the trust would follow for payment of claims, Congoleum said.
"We have addressed the issues that posed potential obstacles to our previous plans," said Roger S. Marcus, Congoleum chairman of the board. "I feel this plan is fair and will provide greater value to all creditors than any alternative available. While negotiations with the creditors are still underway, I am hopeful they ultimately will be satisfied with the terms of this plan and vote to support it. We can then move ahead with confirmation of a plan and put this process behind us."