UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 0549
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) September 7, 2006
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AMERICAN BILTRITE INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-4773 04-1701350
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(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
57 River Street, Wellesley Hills, Massachusetts 02481-2097
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(Address of principal executive offices, including zip code)
(781) 237-6655
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(Registrant's telephone number, including area code)
Not Applicable
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(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 September 7, 2006, American Biltrite Inc.'s majority-owned subsidiary
Congoleum Corporation ("Congoleum") entered into an agreement in principle,
subject to mutually agreeable definitive documentation, with the official
committee representing its bondholders and asbestos claimants' representatives
on certain amendments to Congoleum's pending Chapter 11 plan of reorganization.
As a result, the official bondholders committee has agreed to support
Congoleum's reorganization plan and will be withdrawing the plan of
reorganization it had previously filed jointly with Continental Casualty Company
and Continental Insurance Company.
When entering the scheduling order on September 11, 2006, the Judge set October
26, 2006 as the date for the disclosure statement hearing for Congoleum's
proposed plan of reorganization and for the plan of reorganization previously
filed jointly by the official bondholders committee with Continental Casualty
Company and Continental Insurance Company.
The Company understands that Congoleum expects that its proposed plan of
reorganization will be filed with the Bankruptcy Court by September 15, 2006 and
that it is optimistic that its proposed plan of reorganization will be confirmed
in early 2007.
The agreement in principle is subject to mutually agreeable definitive
documentation which the Company understands will be submitted to the Bankruptcy
Court as part of a new amended plan of reorganization of Congoleum. Interested
parties should refer to the complete Congoleum plan of reorganization and
disclosure statement when it becomes available for details regarding the
Congoleum plan of reorganization. Congoleum has announced that copies of the
modified plan and disclosure statement will be filed by Congoleum with the
Securities and Exchange Commission as exhibits to a filing under the Securities
Exchange Act of 1934.
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.
Forward-Looking Statements
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
Inc.'s expectations, and American Biltrite Inc.'s understanding of Congoleum's
expectations, as of the date of this report, of future events, and American
Biltrite Inc. undertakes no obligation to update any of these forward-looking
statements except as required by the federal securities laws. Although American
Biltrite Inc. 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. There can be no assurance that Congoleum will be
successful in obtaining confirmation of its proposed amended Chapter 11 plan of
reorganization in a timely manner or at all.
Any alternative plan of reorganization pursued by Congoleum or confirmed by the
bankruptcy court could vary significantly from the version of the plan currently
being pursued by Congoleum as to be amended as referred to in this report.
Furthermore, the estimated costs and contributions required to confirm and to
effect the proposed amended plan of reorganization or an alternative plan could
be significantly greater than currently estimated. Any plan of reorganization
pursued by Congoleum will be subject to numerous conditions, approvals and other
requirements, including bankruptcy court approvals, and there can be no
assurance that such conditions, approvals and other requirements will be
satisfied or obtained.
Some additional factors that could cause actual results to differ from
Congoleum's and American Biltrite Inc.'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 Congoleum's proposed modified plan of
reorganization, which certain insurers have objected to in bankruptcy court and
are litigating in New Jersey state court, or any other plan of reorganization;
(iii) costs relating to the execution and implementation of any plan of
reorganization pursued by Congoleum or relating to any other plan or
reorganization proposed by any other party in interest; (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 Inc.'s and Congoleum's respective outstanding debt instruments, and
amendment of those outstanding debt instruments, as necessary, to permit
Congoleum and American Biltrite Inc. to satisfy their obligations under any plan
of reorganization and to make certain covenants in those debt instruments less
restrictive; (vi) the extent to which American Biltrite Inc.'s equity interest
in Congoleum is diluted or otherwise reduced in connection with any plan of
reorganization, including the possible elimination of the interests of all
existing shareholders of Congoleum through implementation of the "cram down"
provisions of the United States Bankruptcy Code if the holders of Congoleum's
Senior Notes do not vote as a class to accept Congoleum's plan of reorganization
in the requisite numbers and amounts required by the United States Bankruptcy
Code; (vii) the response from time-to-time of American Biltrite Inc.'s and
Congoleum's lenders, customers, suppliers, holders of Congoleum's Senior Notes
and their representatives, and other creditors and constituencies to the Chapter
11 process and related developments arising from the strategy to settle asbestos
liability; (viii) 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; (ix) timely obtaining sufficient
creditor and court approval (including the results of any relevant appeals) of a
reorganization plan and the court overruling any objections to the plan that may
be filed; (x) developments in, costs associated with and the outcome of
insurance coverage litigation pending in New Jersey state court involving
Congoleum and certain insurers; (xi) the extent to which Congoleum is able to
obtain reimbursement for costs it incurs in connection with the insurance
coverage litigation; (xii) the impact any adopted federal legislation addressing
asbestos claims may have on American Biltrite Inc.'s and Congoleum's businesses,
results of operations or financial conditions; (xiii) compliance with the United
States Bankruptcy Code, including Section 524(g); (xiv) the possible adoption of
another party in interest's proposed plan of reorganization which may prove to
be unfeasible; and (xv) the ability of American Biltrite Inc. to timely replace
or refinance its secured credit facility, which expires on September 30, 2006.
In addition, in view of American Biltrite Inc.'s relationships with Congoleum,
American Biltrite Inc. could be affected by Congoleum's negotiations regarding
its pursuit of a plan or reorganization, and there can be no assurance as to
what that impact, positive or negative, 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 Inc.'s business, results of operations or financial
condition. Other factors that could cause or contribute to actual results
differing from its expectations include those factors discussed in American
Biltrite Inc.'s other filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended December 31,
2005, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and
its subsequent filings.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
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EXHIBIT NO. DESCRIPTION
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99.1 Bondholder Term Sheet
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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: September 13, 2006 AMERICAN BILTRITE INC.
By: /s/ Howard N. Feist III
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Name: Howard N. Feist III
Title: Chief Financial Officer
Exhibit Index
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EXHIBIT NO. DESCRIPTION
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99.1 Bondholder Term Sheet
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