Armstrong Flooring Inc. and its subsidiaries have filed for Chapter 11 bankruptcy protection and will seek to sell the iconic flooring business through the bankruptcy process.
The company’s operations in China and Australia are not included in the 160-year-old company’s filing, but are part of the sale process.
Armstrong declared debts of $100 million to $500 million.
The company faced a deadline imposed on Sunday by lenders to enter into a definitive binding purchase agreement, merger agreement or other similar agreement. Its ability to continue was dependent on completing a sale or refinancing by June 30, he previously said.
The East Lampeter Township-headquartered company had been looking for a buyer since at least December. He told investors last week that he was likely to file for bankruptcy after failing to find a buyer.
Armstrong employs about 420 people between the factory and company offices in Lancaster County, down about 80 people since December 2020. As of Monday morning, it was unclear how the bankruptcy would affect workers.
In December 2021, Armstrong Flooring retained the services of Houlihan Lokey Capital Inc. to assist in a process to sell the business as well as review other strategic alternatives.
The sale process is continuing and Armstrong Flooring hopes to complete an orderly sale of the entire business or its major assets as soon as possible, the company said in a press release.
“Our company and our team members have worked diligently to strengthen our financial footing in the face of several macroeconomic trends, including supply chain challenges, the current inflationary environment and the continued headwinds of the COVID pandemic. -19,” said President and CEO Michel Vermette in La version. “With the support of our Board of Directors, we have determined that utilizing the Chapter 11 process to effect a potential sale is the right next step for our company.”
“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. In the meantime, we are open for business and remain firmly committed to our customers, suppliers and employees as we navigate the path forward.”
To preserve its operations during the Chapter 11 process, the company entered into a credit agreement, subject to bankruptcy court approval, providing $30 million in debtor-in-possession financing.
If approved by the Delaware bankruptcy court, the financing will provide Armstrong Flooring with the cash needed to operate and cover administrative costs as it pursues a value-maximizing sale.
The company said it would seek out what was necessary to “move into Chapter 11 with the least amount of disruption to its day-to-day operations, including support for employee salary payments and certain benefit programs.”
