Armstrong Flooring files for Chapter 11

Armstrong floorsLancaster, Dad. Armstrong Flooring has announced that the company and certain of its subsidiaries have filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the Delaware District Bankruptcy Court. Continuing its ongoing sales process, the company said it plans to continue to pursue efficient and value-maximizing sales of its business through a competitive Chapter 11 sales process. The company’s operations in China and Australia are not included in the Chapter 11 filing, but are part of the sale process.

In December 2021, Armstrong Flooring acquired Houlihan Lokey Capital Inc. about assisting in a process for the sale of the company, along with considering other strategic alternatives. The sale process continues and Armstrong Flooring said it hopes to achieve an orderly sale of the entire company or its core assets as soon as possible.

“Our company and team members have worked diligently to strengthen our financial base in the face of several macroeconomic trends, including supply chain challenges, the current inflation environment and ongoing headwinds from the COVID-19 pandemic,” said Michel Vermette, president and chief executive officer. “With the support of our board of directors, we have determined that using the Chapter 11 process to drive a potential sale is the right next step for our company. As we have said before, we firmly believe in the value and potential of Armstrong Flooring – and we are confident that this final move puts us in the best position possible to preserve and maximize value for our stakeholders. In the meantime, we are open to business and remain strongly committed to our customers, suppliers and employees as we navigate the way forward.”

To fund and maintain its operations during the Chapter 11 lawsuit, the company said it has entered into a credit agreement, subject to bankruptcy court approval, that provides $30 million in debt-holding (“DIP”) financing. Upon bankruptcy court approval, the DIP financing will provide Armstrong Flooring with the necessary liquidity to operate and cover administrative costs as it pursues a value-maximizing sale.

The company said it will file certain motions in Bankruptcy Court seeking customary waivers that will allow Armstrong Flooring to move into Chapter 11 with the least possible disruption to its normal business operations, including support for the payment of employee wages and certain benefit programs. The company said it expects these motions to be approved within the first few days of the case.

For more information on Armstrong Flooring’s Chapter 11 case, please visit: http://dm.epiq11.com/ArmstrongFlooringe-mail ArmstrongFlooringInfo@epiqglobal.com or call (888) 905-0459 for US calls or +1 (503) 597-5611 for international calls.

The company is represented in this matter by Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel, Houlihan Lokey Capital Inc. as an investment bank and Riveron RTS, LLC as a financial advisor.

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