Armstrong World unsecured creditors to receive 59.5% recovery, down from 66.5%

By Carlise Newman

Chicago, May 23 - Armstrong World Industries Inc. filed its fourth amended reorganization plan and disclosure statement with the U.S. Bankruptcy Court in Wilmington, Del. Under the amended plan, unsecured creditors will receive 59.5% of their allowed claims, compared to a 66.5% recovery stated in the original plan.

The revisions reflect updated information regarding Armstrong World's business since December 2002 and current economic and financial conditions, which are adverse in comparison to the projections previously filed.

Based upon the revised financial projections, the company estimates that holders of allowed unsecured claims will receive a 59.5% recovery. The calculation is based on an estimate that allowed unsecured claims will total $1.65 billion.

Armstrong World estimates the value of the reorganized company at $2.4 to $3 billion, with a mid-point value of $2.7 billion used for reorganization purposes. The revised value of the consideration to be distributed under the plan of reorganization to the asbestos personal injury trust will be $1.8 billion, and the value of consideration to be distributed to holders of allowed unsecured claims will be $982 million.

Existing stock interests in Armstrong World will be cancelled, but the plan provides for a distribution of warrants of the reorganized company to Armstrong Holdings. The warrants have a revised estimated value of $35-$40 million.

A hearing for approval of the disclosure statement is scheduled for May 30.

Armstrong World is a Lancaster, Pa.-based flooring manufacturer.

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