Court Confirms Armstrong Plan of Reorganization

LANCASTER, Pa. , Aug. 15, 2006 – Armstrong World Industries, Inc. (“AWI”), a global leader in the design and manufacture of flooring, ceilings and cabinets, announced today that U.S. District Court Judge Eduardo Robreno issued a decision confirming AWI’s “Fourth Amended Plan of Reorganization, as Modified,” dated February 21, 2006 (the “Plan”).  The Company expects that a formal confirmation order will be entered by the District Court shortly.  AWI currently expects to emerge from Chapter 11 in the fourth quarter of 2006.

“I am grateful for the support of our employees, customers, suppliers and other business partners during the reorganization process,” said Michael D. Lockhart, AWI’s Chairman and Chief Executive Officer.  “Consistent with our purpose in seeking relief under Chapter 11, the Plan provides the Company with a binding resolution of its asbestos liability.”

Pursuant to the Plan, AWI will establish a trust in accordance with the provisions of section 524(g) of the U.S. Bankruptcy Code to satisfy all current and future asbestos personal injury claimants (the “Trust”).   AWI will fund the Trust by making a one-time contribution of a combination of cash, notes and common stock of the reorganized AWI.  Based on the Plan’s estimated value of the stock of reorganized AWI, the contribution to the Trust will have a value of approximately $1.8 billion.  Those assets will be administered by the Trust’s trustees and used to pay asbestos claims in accordance with the provisions of the Plan.  Reorganized AWI will have no role or responsibility in the administration of the Trust.  Pursuant to the Plan, all present and future asbestos personal injury claims must be asserted against the Trust, and all asbestos claimants will be permanently enjoined from pursuing their claims against reorganized AWI.

The Plan provides for unsecured creditors to receive pro rata distributions on account of their allowed claims through a combination of cash, notes and common stock of the reorganized AWI.  Based on the Plan’s estimated value of the stock of reorganized AWI, unsecured creditors are expected to receive distributions equal to approximately 59.5% of their allowed claims.

Current shareholders of AWI’s parent company, Armstrong Holdings, Inc. (“AHI” – OTC Bulletin Board: ACKHQ), do not receive any distributions under the Plan.  Following AWI’s emergence, AHI is expected to dissolve .

For access to copies of the Plan, related exhibits and the Confirmation Order, please visit http://www.armstrongplan.com.
Additional Links
Armstrong Plan Summary
Decision Denying UCC Objection to Confirmation

Forward Looking Statement

These materials may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements provide expectations or forecasts of future events. Our results could differ materially due to known and unknown risks and uncertainties, including: Armstrong World Industries, Inc.'s ("AWI") Chapter 11 case and its asbestos liabilities; lower construction activity reducing our market opportunities; availability and costs for raw materials and energy; risks related to our international trade and business; business combinations among competitors, suppliers and customers; the loss of business with key customers; and other factors disclosed in our recent reports on Forms 10-K, 10-Q and 8-K filed with the SEC. We undertake no obligation to update any forward-looking statement.

 

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