Armstrong Flooring U.S. trustee to appoint committee of retirees

By Sarah Lizee

Olympia, Wash., June 6 – Armstrong Flooring, Inc. will have an official committee of retired employees appointed by the U.S. trustee for Regions 3 and 9, Andrew R. Vara, according to an order filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

In its motion, the company said that many of the participants in its retiree plans are non-union retirees, or their spouses and dependents, thus a committee is needed for representation.

Armstrong said that given the posture of its Chapter 11 cases, its limited liquidity, and the need to preserve estate value during the proposed sale process, the debtors consider it is necessary to pursue the modification or termination of the retiree plans.

“The ongoing expenditures required under the retiree plans – nearly $245,000 per month – are cost-prohibitive given the debtors’ limited liquidity and the constraints imposed by the budget under their proposed DIP financing,” the company said in its motion.

“Additionally, prospects for a going-concern bid – much less one contemplating the assumption of the retiree plans – are uncertain.”

Without any such bid, the debtors won’t have any means to continue the retiree plans, the company added.

The Lancaster, Pa.-based flooring designer and manufacturer filed bankruptcy on May 8 under Chapter 11 case number 22-10426.

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