Armstrong to emerge from Chapter 11; U.S. District Court OKs modified plan
"I am grateful for the support of our employees, customers, suppliers and other business partners during the reorganization process," said Michael D. Lockhart, Armstrong's chairman and CEO. "Consistent with our purpose in seeking relief under Chapter 11, the plan provides the company with a binding resolution of its asbestos liability."
Armstrong said it will establish a trust to satisfy all current and future asbestos personal injury claimants. The trust will be funded with a one-time contribution of cash, notes and common stock of the reorganized company, Armstrong noted. The company expects the trust to be valued at approximately $1.8 billion. Plans call for assets to be used to pay asbestos claims.
Additionally, Armstrong said the reorganized company will have "no role or responsibility in the administration of the trust." The plan also provides for unsecured creditors to receive pro rata distributions of their allowed claims and are expected to receive distributions equal to approximately 59.5 percent of those claims. Current shareholders of Armstrong's parent company, Armstrong Holdings, Inc. (AHI) will not receive any distributions under the plan. Following Armstrong's emergence, AHI is expected to dissolve, the company noted.