Armstrong Flooring’s employee retention plan draws trustee objection

By Sarah Lizee

Olympia, Wash., June 17 – Armstrong Flooring, Inc.’s proposed key employee retention plan drew an objection on Friday from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to court documents filed with the U.S. Bankruptcy Court for the District of Delaware.

Vara said that in their motion, the debtors didn’t disclose the names or titles of the employees taking part in the KERP. However, the U.S. trustee has received a confidential list of the participants from the company.

Vara said he believes that at least two of the employees are insiders.

The U.S. trustee said that the debtors have the burden of establishing, with evidence, that each of the participants in the KERP are not insiders.

The U.S. trustee said that under bankruptcy code, insider retention plans are “severely restricted.”

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

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