eps3194.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
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Date
of Report (Date of earliest event reported) November 14,
2008
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AMERICAN
BILTRITE INC.
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(Exact
Name of Registrant as Specified in
Charter)
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Delaware
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1-4773
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04-1701350
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(State
or other jurisdiction of incorporation)
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(Commission
File No.)
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(IRS
Employer Identification No.)
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57
River Street, Wellesley Hills, Massachusetts 02481-2097
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(Address
of principal executive offices, including zip
code)
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(781)
237-6655
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(Registrant's
telephone number, including area
code)
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
8.01 OTHER EVENTS
On
November 14, 2008, an amended plan of reorganization (the "Amended Plan") and a
disclosure statement (the “Disclosure Statement”) for Congoleum Corporation
("Congoleum"), a majority-owned subsidiary of American Biltrite Inc. ("American
Biltrite"), was filed with the United States Bankruptcy Court for the District
of New Jersey in the Chapter 11 proceedings of Congoleum. The Amended
Plan was filed jointly by Congoleum and Congoleum's debtor subsidiaries, the
official asbestos claimants' committee, and the official committee of
bondholders. A hearing to consider the adequacy of the Disclosure Statement
describing the Amended Plan is scheduled for December 18, 2008.
If
the Amended Plan is approved by the Bankruptcy Court and accepted by the
requisite creditor constituencies, it will permit Congoleum to exit
Chapter 11 free of liability for existing or future asbestos
claims. Under the terms of the Amended Plan, a trust will be created that will assume
the liability for Congoleum’s current and future asbestos
claims. That trust will receive the proceeds of various settlements
Congoleum has reached with a number of insurance carriers, and will be assigned
Congoleum’s rights under its remaining policies covering asbestos product
liability. The trust will also receive 70% of the newly issued common
stock in reorganized Congoleum when the Amended Plan takes effect and
$5 million in new 9.75% senior secured
notes that mature five years from issuance.
Holders of Congoleum’s $100 million in
8.625% senior notes that matured in August 2008 will receive on a pro rata basis
$70 million in new 9.75% senior secured notes that mature five years from
issuance. The new senior secured notes will be subordinated to the
working capital facility that provides Congoleum’s financing upon exiting
reorganization. In addition, holders of the $100 million in 8.625%
senior notes due in August 2008 will receive 30% of the common stock in
reorganized Congoleum. Congoleum’s obligations for the $100 million
in 8.625% senior notes due in August 2008, including accrued interest (which
amounted to $44.6 million at December 31, 2007) will be satisfied by the new senior
secured notes and the common stock issued when the Amended Plan takes
effect.
Under
the terms of the Amended Plan, existing Class A and Class B common shares of
Congoleum will be cancelled when the plan takes effect and holders of those
shares, including American Biltrite, will not receive
anything on account of their cancelled shares
The
Amended Plan also includes certain terms that would govern an intercompany
settlement and ongoing intercompany arrangements among American Biltrite and its
subsidiaries and reorganized Congoleum which would be effective when the Amended
Plan takes effect and would have a term of two years. Those
intercompany arrangements include the provision of management services by
American Biltrite to reorganized Congoleum and other business relationships
substantially consistent with their traditional relationships. The
Amended Plan provides that the final terms of the intercompany arrangements
among American Biltrite and its subsidiaries and reorganized Congoleum will be
memorialized in a new agreement to be entered into by reorganized Congoleum and
American Biltrite in form and substance mutually agreeable to the future
claimants' representative, the official committee of bondholders, the official
asbestos claimants' committee and American Biltrite.
The
foregoing description of the Amended Plan does not purport to be complete, does
not address all the matters impacting Congoleum and American Biltrite under that
plan and is subject to, and qualified in its entirety by, the Amended Plan and
the Disclosure Statement relating thereto. Copies of the Amended Plan, the
Disclosure Statement and the New ABI Agreement are attached hereto as Exhibits
99.1, 99.2 and 99.3, respectively, and are incorporated by reference
herein. Readers should refer to the Amended Plan and the proposed
Disclosure Statement for details of the Amended Plan, including treatment of
American Biltrite's claims and interests, and other business relationships with
Congoleum.
On
December 31, 2003, Congoleum Corporation filed a voluntary petition with the
United States Bankruptcy Court for the District of New Jersey (Case No.
03-51524) seeking relief under Chapter 11 of the United States Bankruptcy Code
as a means to resolve claims asserted against it related to the use of asbestos
in its products decades ago.
Warning
About Forward-Looking Statements
Some
of the information presented in this Current Report on Form 8-K constitutes
"forward-looking statements," within the meaning of the Private Securities
Litigation Reform Act of 1995, that involve risks, uncertainties and
assumptions. These forward-looking statements are based on American
Biltrite's expectations, and American Biltrite's understanding of Congoleum's
expectations, as of the date of this report, of future events, and American
Biltrite undertakes no obligation to update any of these forward-looking
statements except as required by the federal securities laws. Although American
Biltrite believes that these expectations are based on reasonable assumptions,
within the bounds of its knowledge of its business and operations, there can be
no assurance that actual results will not differ materially from its
expectations. Readers are cautioned not to place undue reliance on
any forward-looking statements. There can be no assurance that a plan
of reorganization for Congoleum will be confirmed in a timely manner or at
all. In addition, there can be no assurance that American Biltrite,
Congoleum and other applicable Congoleum constituencies will be able to reach
agreement on the terms of any management services proposed to be provided by
American Biltrite to reorganized Congoleum or any other proposed business
relationships among American Biltrite and its affiliates and reorganized
Congoleum. Any plan of reorganization for Congoleum that may be
confirmed may have terms that differ significantly from the terms contemplated
by the version of the plan referred to in this report, including with respect to
any management services that may be provided by American Biltrite to reorganized
Congoleum and American Biltrite's claims and interests and other business
relationships with reorganized Congoleum.
Some
additional factors that could cause actual results to differ from Congoleum's
and American Biltrite's objectives for resolving asbestos liability include: (i)
the future cost and timing of estimated asbestos liabilities and payments; (ii)
the availability of insurance coverage and reimbursement from insurance
companies that underwrote the applicable insurance policies for asbestos-related
claims, including insurance coverage and reimbursement for asbestos claimants
under any plan of reorganization for Congoleum, which certain insurers have
objected to in Bankruptcy Court and are litigating in New Jersey State Court;
(iii) the costs relating to the execution and implementation of any plan of
reorganization for Congoleum; (iv) timely reaching agreement with other
creditors, or classes of creditors, that exist or may emerge; (v) satisfaction
of the conditions and obligations under American Biltrite's and Congoleum's
outstanding debt instruments, and amendment or waiver of those outstanding debt
instruments, as necessary, to permit Congoleum and American Biltrite to satisfy
their obligations under any plan of reorganization for Congoleum; (vi) the
response from time-to-time of the of the holders of Congoleum’s senior notes
and the lenders, customers, suppliers and other constituencies of
American Biltrite and Congoleum to the Chapter 11 process and related
developments arising from the strategy to resolve its asbestos liability; (vii)
Congoleum's ability to maintain debtor-in-possession financing sufficient to
provide it with funding that may be needed during the pendency of its Chapter 11
case and to obtain exit financing sufficient to provide it with funding that may
be needed for its operations after emerging from the bankruptcy process, in each
case, on reasonable terms; (viii) timely obtaining sufficient creditor and court
approval (including the results of any relevant appeals) of any reorganization
plan for Congoleum, and the court overruling any objections to that plan that
may be filed; (ix) developments in, costs associated with and the outcome of
insurance coverage litigation pending in New Jersey State Court involving
Congoleum and certain insurers; (x) the impact any adopted federal legislation
addressing asbestos claims may have on American Biltrite's and Congoleum's
businesses, results of operations or financial conditions; (xi) compliance with
the United States Bankruptcy Code, including section 524(g); and (xii) the
possible adoption of another party in interest's proposed plan of reorganization
which may prove to be unfeasible.
In
addition, in view of American Biltrite's relationships with Congoleum, American
Biltrite could be affected by Congoleum's negotiations regarding its pursuit of
a plan of reorganization, and there can be no assurance as to what that impact,
positive or negative, might be. In any event, the failure of
Congoleum to obtain confirmation and consummation of a Chapter 11 plan of
reorganization would have a material adverse effect on Congoleum's business,
results of operations or financial condition and could have a material adverse
effect on American Biltrite's business, results of operations or financial
condition.
Other
factors that could cause or contribute to actual results differing from its
expectations include those factors discussed in American Biltrite's other
filings with the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the fiscal year ended December 31, 2007, its Quarterly Report
on Form 10-Q for the quarter ended September 30, 2008 and its subsequent
filings.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibits
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Exhibit
No.
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Description
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99.1
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Amended
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code of
the Debtors, the Official Asbestos Claimants’ Committee and the Official
Committee of Bondholders for Congoleum Corporation dated as of November
14, 2008
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99.2
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Disclosure
Statement with Respect to the Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code of the Debtors, the
Official Asbestos Claimants’ Committee and the Official
Committee of Bondholders for Congoleum Corporation, dated as of November
14, 2008
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99.3
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Form
of Management Services and Commercial Agreement, which is Exhibit I to
Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy
Code of the Debtors, the Official Asbestos Claimants’ Committee and the
Official Committee of Bondholders for Congoleum Corporation, dated as of
November 14, 2008
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Date:
November 20, 2008
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AMERICAN
BILTRITE INC.
By:
/s/ Howard N.
Feist III
Name: Howard
N. Feist III
Title: Chief
Financial Officer
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Exhibit
Index
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Exhibit
No.
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Description
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99.1
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Amended
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code of
the Debtors, the Official Asbestos Claimants’ Committee and the Official
Committee of Bondholders for Congoleum Corporation, dated as of November
14, 2008
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99.2
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Disclosure
Statement with Respect to the Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code of the Debtors, the
Official Asbestos Claimants’ Committee and the Official
Committee of Bondholders for Congoleum Corporation, dated as of November
14, 2008
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99.3
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Form
of Management Services and Commercial Agreement, which is Exhibit I to
Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy
Code of the Debtors, the Official Asbestos Claimants’ Committee and the
Official Committee of Bondholders for Congoleum Corporation, dated as of
November 14, 2008
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