Congoleum Corp. seeks to resolve asbestos liability
Congoleum expects that the plan of reorganization would provide for an assignment of applicable Congoleum insurance to a trust that would fund both the settlement of pending asbestos claims as well as future asbestos claims, and that the plan would leave Congoleum's trade creditors unimpaired and protect the company from any future asbestos-related litigation. By reaching an agreement in advance of filing with the plaintiffs that leaves other classes of creditors unimpaired, Congoleum expects that the post-filing process would result in a swifter and less costly reorganization than would be the case with a non-prepackaged bankruptcy.
Congoleum expects it would take from four to six months to negotiate a prepackaged plan of reorganization, at which time it would file for bankruptcy and request court approval of the plan. Congoleum expects it would take another two to six months to have the plan confirmed and emerge from the process. Upon filing, Congoleum intends to seek immediate court approval to continue to pay all its pre-petition trade creditors in the ordinary course of its business, and consistent with past practices.