FCNews Year In Review, October 2006, Armstrong exits bankruptcy after six years
Armstrong emerged from Chapter 11 once its “Fourth Amended Plan of Reorganization, as Modified” became effective two weeks ago. The $2.8 billion plan creates a new corporation — about a third will be owned by unsecured creditors and the balance by a trust formed to pay and administer all asbestos claims.
In addition to resolving its asbestos liability, Armstrong used the time in Chapter 11 to restructure its flooring business to make it more competitive. The vinyl flooring segment saw its profits improve, but eight plants were closed and 1,500 workers were idled. Armstrong also added capacity in its wood flooring business, put more emphasis on the commercial market, cut its debt and strengthened its balance sheet.
Armstrong, which has annual sales of $3.6 billion, initially planned on emerging from bankruptcy three years ago. But its unsecured creditors, who at first had supported Armstrong’s plan, turned against it.
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