Armstrong Flooring Files for Chapter 11 Bankruptcy
Armstrong Flooring and some of its subsidiaries have filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
“Our business and team members have been working diligently to strengthen our financial foundation in the face of several macroeconomic trends, including supply chain challenges, the current inflationary environment and continued headwinds from the Covid-19 pandemic,” says Armstrong president and CEO Michel Vermette. “With the support of our board of directors, we have determined that using the Chapter 11 process to effectuate a potential sale is the right next step for our company.”
In a continuation of its ongoing sale process, Armstrong says it intends to carry on pursuing an efficient and value-maximizing sale of its business through a competitive Chapter 11 sale process.
The company’s businesses in China and Australia are not included in the filing but they are part of the sale process.
“As we have said previously, we firmly believe in the value and potential of Armstrong Flooring and we are confident that this definitive action puts us in the best possible position to preserve and maximize value for our stakeholders,” says Vermette. “In the meantime, we are open for business and remain firmly committed to our customers, vendors and employees as we navigate the path forward.”
In order to fund and preserve its operations during the Chapter 11 process, Armstrong has entered into a credit agreement, providing for $24-million of debtor-in-possession (DIP) financing. Recently approved by the Bankruptcy Court, the DIP financing provides Armstrong with the necessary liquidity to operate and cover administrative expenses as it pursues a value-maximizing sale.