Life and health insurance benefits for retirees from Armstrong Flooring Inc. are still at stake while the company is in the process of Chapter 11 Bankruptcy Sale.
On Friday, a lawyer at Armstrong Flooring Inc. said in a bankruptcy court in Delaware that interested buyers of the company do not want to underwrite retiree health and life insurance benefits.
Ron Meisler of Skadden, Arps, Slate, Meagher & FlomLLP said the “real reality so far” was that all bidders Armstrong Flooring had contacted said they didn’t want to take on the debt of retirees. I did. advantage.
Armstrong Flooring, based in East Lampeter Township, has stated that it wants to abolish the payment of health and life insurance plan obligations. Armstrong Flooring says that the ongoing spending required under retiree plans (about $ 245,000 per month) is exorbitant given the company’s cash shortages and budgetary constraints under funding. Claimed to be expensive.
Approximately 1,660 retirees receive health insurance benefits and approximately 2,000 retirees receive life insurance benefits. According to Mysler, health benefits are about $ 15 million and life insurance is an obligation of $ 40 million. He also said that the annual management fee is between $ 2 million and $ 3 million.
At the request of Armstrong Flooring, the court allowed the US trustee to appoint a committee of retirees to negotiate with the company. The committee includes only non-union retirees. The United Steelworkers and the International Association of Machinists and Aerospace Workers represent retirees on this issue.
Mr. Mysler said Armstrong Flooring is not closing the door on the possibility that bidders may want to take on debt. The bid deadline is June 14th and the auction will be set to June 16th if necessary. If a successful buyer does not assume debt, Armstrong Flooring is likely to return to court to abolish or mitigate its obligations, Meissler said.
Thursday, April 7, 2022, Armstrong Flooring on 1770 Hempstead Road in East Lampeter Township.
Other issues discussed during the interview on Friday’s debtor financing included payments to key vendors and rent payments to high properties. High Properties is the landlord of Armstrong Flooring’s headquarters on 1770 Hempstead Road in East Lampeter Township.
Armstrong Flooring is in the process of paying unpaid rent before the bankruptcy filing on May 8. The company’s lawyer said Armstrong Flooring had written a check for about $ 213,000 in June rent and paid the pre-petition rent.
Armstrong Flooring said it may need to extend the loan until July 7, so High Property sought to ensure that rent for that period was also dealt with. High Properties wanted to make sure that these payments were within the debtor’s budget.
Armstrong Flooring has an estimated $ 318 million in debt, including a $ 160 million long-term debt, seeking protection from bankruptcy lenders. The company has received court approval to sell $ 517 million worth of assets.
Armstrong Flooring intends to sell its assets in North America, China and Australia as a going concern. Each bidder includes a going concern buyer. The going concern assumption means that the company will continue to do business. The company acknowledged that there may be bidders trying to liquidate their assets.
Armstrong operates seven manufacturing plants in three countries. Two factories are located in Pennsylvania, one in Lancaster and one in Beech Creek Township, Clinton County. There are plants in Illinois, Mississippi, Oklahoma, and one in China and one in Australia. Plants in China and Australia are not part of bankruptcy, but part of the sale.
Last month, Armstrong informed all workers that if the company could not find a buyer who was interested in continuing it, it could be permanently dismissed by the end of this month. did.
The first meeting of the Creditors Commission, held on June 9, will be held outside the presence of judges and will be run by representatives of the US Trustees’ Office. Meetings can be as short as 15 minutes. The purpose of the Creditors Commission is to ensure that unsecured creditors, who may have relatively small debts, continue to participate in bankruptcy proceedings. The Commission is appointed by a US trustee and usually consists of unsecured creditors holding the seven largest unsecured claims against the debtor.
This is Armstrong Flooring Pattern # 5352 in Armstrong’s Design Center on Wednesday, November 7, 2021 at Hempstead Road.
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