eps3328.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
|
Date
of Report (Date of earliest event reported) February 26,
2009
|
|
|
|
AMERICAN
BILTRITE INC.
|
|
(Exact
Name of Registrant as Specified in
Charter)
|
|
Delaware
|
|
1-4773
|
|
04-1701350
|
|
(State
or other jurisdiction of incorporation)
|
|
(Commission
File No.)
|
|
(IRS
Employer Identification No.)
|
|
57
River Street, Wellesley Hills, Massachusetts 02481-2097
|
|
(Address
of principal executive offices, including zip
code)
|
|
(781)
237-6655
|
|
(Registrant's
telephone number, including area
code)
|
|
Not
Applicable
|
|
(Former
name or former address, if changed since last
report)
|
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:
|
☐
|
Written
communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|
|
☐
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
☐
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
☐
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
ITEM
8.01 OTHER EVENTS
On
February 26, 2009, the United States Bankruptcy Court for the District of New
Jersey (the “Bankruptcy Court”) rendered an opinion (the “Opinion”) regarding
the motion of First State Insurance Company and Twin City Fire Insurance Company
for summary judgment denying confirmation of the amended joint plan of
reorganization (the “Amended Plan”) under Chapter 11 of the Bankruptcy Code of
Congoleum Corporation (“Congoleum”), a majority-owned subsidiary of American
Biltrite Inc. ("American Biltrite"), the Official Asbestos Claimants’ Committee
and the Official Committee of Bondholders for Congoleum (the “Bondholders’
Committee”), et al.. Pursuant to the Opinion, the Bankruptcy Court
entered an order dismissing Congoleum’s bankruptcy case (the “Order of
Dismissal”).
On
February 27, 2009, Congoleum and the Bondholders’ Committee appealed the Order
of Dismissal to the U.S. District Court for the District of New
Jersey. On March 3, 2009, an order was entered by the Bankruptcy
Court granting a stay of the Bankruptcy Court’s Order of Dismissal pending
appeal of the Order of Dismissal.
A
copy of the Opinion is attached hereto as Exhibit 99.1 and is incorporated by
reference herein.
A
copy of the Amended Plan was attached as Exhibit 99.1 to the Current Report on
Form 8-K filed by American Biltrite with the Securities Exchange Commission on
November 20, 2008.
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 and Certain Risks
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. Actual results could differ
significantly as a result of various factors. For example, the
disclosure in this report of the appeal of the Order of
Dismissal and the Bankruptcy Court’s granting a stay of its Order of Dismissal
pending appeal of the Order of Dismissal may imply that Congoleum’s chapter 11
case will not be dismissed and that the Amended Plan will proceed. In
fact, the appeal of the Order of Dismissal may be denied by the District Court
and the Bankruptcy Court’s grant of a stay of its Order of Dismissal pending
appeal of the Order of Dismissal could be subsequently
vacated. Moreover, if the appeal were denied,
Congoleum’s chapter 11 case could be dismissed,
resulting
in Congoleum no longer benefiting from the protection from creditor claims
currently afforded to it by the chapter 11 case and the United States Bankruptcy
Code. Further, as indicated in the Order, Congoleum’s ability to
refile another bankruptcy petition may be limited, which could result in
Congoleum having to attempt to conduct its business and operations outside of
the protections of the Bankruptcy Code, including attempting to defend against,
satisfy or defray its creditor claims, such as its substantial asbestos
liabilities and its senior notes, and continued litigation against its insurers
to attempt to obtain insurance coverage for Congoleum’s asbestos
liabilities. It is unclear what effect the Order of Dismissal, the stay of
the Bankruptcy Court’s Order of Dismissal pending appeal of the Order of
Dismissal and the continued litigation may have on Congoleum’s business and
operations, including with regard to its relationships with its vendors,
suppliers, customers, lenders and other constituencies.
As
disclosed in previous filings American Biltrite has made with the Securities and
Exchange Commission, American Biltrite has certain management and commercial
arrangements with Congoleum. The Amended Plan 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 would be memorialized in a new agreement to be entered
into by reorganized Congoleum and American Biltrite in form and substance
mutually agreeable to the Bondholders’ Committee, the official asbestos
claimants' committee and American Biltrite. The existing arrangements
currently in effect among American Biltrite and its non-debtor subsidiaries and
Congoleum expire on June 30, 2009 unless renewed. If the
appeal were denied, it is uncertain what would become of American
Biltrite’s and its nondebtor subsidiaries’ claims against and relationships with
Congoleum, although American Biltrite expects that those claims and
relationships could be adversely affected and could even be rendered
worthless.
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 Amended Plan, 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.
In
addition, in view of American Biltrite's relationships with Congoleum, American
Biltrite could be affected by the litigation regarding Congoleum’s chapter 11
case and Congoleum's negotiations regarding its pursuit of a plan or
reorganization, and there can be no assurance as to what that impact 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.
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 lenders, customers, suppliers, holders of
Congoleum's senior notes and other creditors and constituencies to
the chapter 11 process and related developments arising from the strategy to
resolve 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) costs
of, developments in, 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; and (xi) compliance with the Bankruptcy Code, including section
524(g).
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
|
Exhibit
No.
|
Description
|
|
99.1
|
Opinion
of the United States Bankruptcy Court for the District of New Jersey,
dated February 26, 2009.
|
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.
|
Date:
March 4, 2009
|
AMERICAN
BILTRITE INC.
By:
_/s/ Howard N.
Feist III
Name: Howard
N. Feist III
Title: Chief
Financial Officer
|
Exhibit
Index
|
Exhibit
No.
|
Description
|
|
99.1
|
Opinion
of the United States Bankruptcy Court for the District of New Jersey,
dated February 26, 2009.
|