Here’s What Happened With Armstrong Flooring’s Bankruptcy Today | Local company
Here’s a roundup of what’s new in Armstrong Flooring’s bankruptcy on Wednesday.
The judge approves the sale
Delaware Bankruptcy Judge Mary Walrath approved the sale of Armstrong Flooring Inc. to West Hempfield Township-based AHF Products Inc. and Gordon Brothers Commercial & Industrial of Boston.
Walrath’s approval was the final hurdle in the $107 million deal for the company’s North American assets. Armstrong Flooring and AHF said they expect the deal to close by July 22.
Meanwhile, funding to allow Armstrong Flooring to continue operating until the deal closes on July 22 has not been finalized. Lenders Pathlight Capital and Bank of America, NA resolved objections with Armstrong Flooring and indicated in court Wednesday that financing should be accepted if there were no further objections.
Objections to the financing arrangement must be filed no later than Friday 4:00 p.m. If there is no objection, the judge can approve the financing on Friday. If there are any objections, which seems unlikely, the case will go to court on Monday if not settled over the weekend.
The judge also approved the sale of the company’s Chinese and Australian operations. Giant Group, also known as Zhejiang GIMIG Technology Co. Ltd., will acquire the stakes in the Hong Kong holding company subsidiary, including all associated operations for $59 million, and Cowes Bay will acquire nearly all all of the company’s Australian assets for $31. million plus support for specified liabilities.
The Chinese and Australian companies will continue to operate as usual pending the completion of the respective sales.
New details on expected job losses
The Lancaster County Chamber of Commerce said Wednesday that the two job fairs it plans with Armstrong Flooring for displaced workers will include companies offering jobs in customer service, supply chain/ operations and other positions in the company.
The Chamber declined to provide specific dates for the fairs, but said they would take place in the next few days or early next week.
The Chamber is also offering an in-person resume workshop that will be recorded and available to Armstrong Flooring employees who cannot attend in person.
Companies that have engaged in career fairs include TriStarr, High Companies, Penn Medicine Lancaster General Health, Penn State Health, Ecore, and CareerLink.
It looks like the job losses will mostly focus on corporate and administrative employees rather than production workers, whose union contracts will follow them to AHF Products. How many jobs will be lost remains an open question.
According to court documents, no later than three days after the close, AHF Products (or its designated subsidiary) is supposed to provide employees it identifies with a job offer. Unless they specifically reject the offer, they will be considered employees of AHF, according to court documents. Armstrong Flooring and AHF would not say how many people will be moved as part of the transaction.
As of May, Armstrong Flooring had 606 employees in Lancaster County. About 390 of them were non-union employees who work or are assigned to the Greenfield headquarters. These employees work in sales, design research and administration. AHF is also headquartered in West Hempfield Township, so some wonder whether head office jobs, instead of warehousing or production jobs, would be more likely to be eliminated. AHF does not have production facilities in Lancaster County.
Next court date
On Monday, the financing and the liquidation budget will be submitted for the approval of the bankruptcy court. Arguments are also planned to provide health and life insurance benefits to non-union retirees.
A retention plan for 50 key mid-level executives was due to be debated on Monday, but Armstrong Flooring said in court it was abandoning the plan. Monday’s hearing is an omnibus, which means other issues could be added to the agenda.