In what the flooring maker heralded as “an exciting day,” Armstrong World Industries announced it emerged from bankruptcy last month. The company’s fourth and final plan of organization marked the end of nearly six years under Chapter 11 protection as the result of asbestos-related litigation. The plan calls for Armstrong to create a trust to compensate both current and future asbestos-related claimants, as well as a reorganization of the company’s board of directors.
Michael D. Lockhart, Armstrong chairman and CEO, is expected to continue in his current role. Along with Lockhart, board members Judith Haberkorn and John Roberts are expected to serve on the new Armstrong board of directors.
Six new members with experience outside of the flooring industry have also been added to the board. They are: James Gaffney, chairman of Imperial Sugar Co.; Robert Garland, CEO of AFR Holdco Inc., American Fiber Resources and Great Lakes Pulp Co.; Scott Miller, president and CEO of Six Sigma Academy; Russell Peppet, special advisor to Park Avenue Equity Partners; Arthur Pergament, CEO of Pergament Advisors LLC; and Hon. Alexander Sanders Jr., chief judge of the South Carolina Court of Appeals.
“We are emerging from Chapter 11 with less debt and a stronger balance sheet than six years ago,” said Lockhart. “Our solid capital structure, combined with our recent financial performance, means that our employees, customers, distributors, suppliers and other business partners can be assured that the company is on strong financial footing with good prospects for continued growth and profitability going forward.”
As part of the plan of reorganization, Armstrong has established a new trust, valued at $1.8 billion, to be funded with a one-time contribution of cash, notes and common stock of the reorganized company. As part of its exit financing, Armstrong said it expects to receive $1.1 billion in a senior credit facility, made up of a $300 million revolving credit facility, a $300 million loan with a five year maturity, and a $500 million loan with a seven year maturity.
Armstrong emerges from bankruptcy, reorganizes board of directors
November 1, 2006