Armstrong Flooring Inc. told a Delaware bankruptcy judge this afternoon that it had postponed its sale hearing until July 12.
The company did not explain why it postponed the sale hearing, but Judge Mary Walrath said the request was made so that the details of a proposed sale “can be finalized”. No sale can be concluded without the approval of the judge.
Lawyers for the company said they had resolved the unions’ objections to the end of the collective agreements. Details of the resolution were due to be filed in court by July 12.
Today’s hearing, which was originally scheduled for 11:30 a.m. and then pushed back to 3 p.m. today, was originally scheduled to be a sale hearing in which Armstrong Flooring would present its plan to sell or close to the bankruptcy court. The company had indicated that it would not have the necessary funds to continue ongoing operations after today. No explanation was given in court today on how the company would finance its operations until July 12.
Workers leaving Armstrong Flooring’s municipal warehouse in Lancaster on Loop Road at the end of their shift this afternoon said they had heard nothing from the company and were frustrated by the continuing uncertainty . They declined to give their names.
Ahead of today’s hearing, the court had admitted attorneys for companies not previously involved in the 2-month bankruptcy proceedings: AHF Products, a flooring company based in West Hempfield Township; and Gordon Brothers, a Boston-based global consulting firm known for liquidating assets.
A source said a mandatory meeting of all AHF workers was announced today, then canceled in the afternoon around 2 p.m. when Armstrong Flooring filed court documents stating that the hearing would be transformed into a hearing on the status of a sales hearing. Documents filed by Armstrong Flooring said discussions of retiree benefits, which were to be discussed today in addition to sales contracts and unions, have been adjourned until July 12.
There are approximately 1,200 Armstrong Flooring employees nationwide, including approximately 606 in Lancaster County where it is headquartered and operates a manufacturing plant and warehouse.
Approximately 215 employees work at Armstrong Flooring’s municipal facilities in Lancaster on Dillerville Road and Loop Road, and the remainder work, are assigned to or report to Greenfield’s head office on Hempstead Road in East Lampeter Township.
The sale of the business should be approved by Walrath. There have been several objections to a sale from labor unions and companies such as High Companies, which holds the lease of Armstrong Flooring’s headquarters.
A sale would allow the company to pay its secured creditors, Pathlight Capital and Bank of America NA, which owe $98 million and $65 million, respectively. Pathlight and Bank of America would also be repaid for a $24 million loan that allowed Armstrong Flooring to file for bankruptcy and sell it. It is not clear if all the money was spent over 60 days.
Other priority payments would include administrative expenses and pre-bankruptcy bonuses promised to executives. It is unclear how much, if any, scores unsecured creditors would receive.
Unsecured creditors outside the company range from the highest claim of Klockner-Pentaplast of America Inc., which says it owes more than $4.3 million for plastic films used to make luxury vinyl flooring, to employees claiming unspecified amounts from their employee stock ownership pension plan. and shareholders with as few as 10 shares.
The company owes about $318 million, including $160 million in long-term debt. He previously received court approval to sell his assets which he values at $517 million.
Armstrong operates seven manufacturing plants in three countries. Two factories are in Pennsylvania, one in the city of Lancaster and one in Beech Creek Township, Clinton County, which employed approximately 35 people. There are factories in Illinois, Mississippi, Oklahoma and a factory in China and Australia.
The factories in China and Australia are not part of the bankruptcy but are part of the sale. Assets also include trademarks and intellectual property.
Writers Ashley Stalnecker and Sarah Pellis contributed to this report.