UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) February 3, 2006
----------------
AMERICAN BILTRITE INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 1-4773 04-1701350
---------------------------- ----------- -------------
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
57 River Street, Wellesley Hills, Massachusetts 02481-2097
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(781) 237-6655
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
-------------------------------------------------------------
(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 February 3, 2005, American Biltrite Inc.'s majority-owned subsidiary
Congoleum Corporation ("Congoleum") filed a further modified plan of
reorganization, disclosure statement and related documents with the Bankruptcy
Court. Under the terms of the proposed modified plan, on the effective date of
the plan, Congoleum would make a contribution to the plan trust that would be
established upon the effective date of the plan consisting of: (1) 3.8 million
shares of Congoleum Class A common stock, (2) preferred stock or a promissory
note to be issued by reorganized Congoleum that would have an initial
liquidation preference or principal amount, as applicable, of $2,738,234.75,
which amount would be subject to further increase at a future date based on the
market capitalization of reorganized Congoleum, and upon a specified default of
the obligation to pay dividends or interest, as applicable, and a failure to
cure such default within any applicable cure period, would be convertible into
an additional number of shares of Congoleum Class A common stock that, when
combined with the 3.8 million shares of Congoleum Class A common stock referred
to above, would result in the plan trust owning 51% of the voting common shares
of reorganized Congoleum on a fully diluted basis, and (3) a cash contribution
in an amount equal to $7.3 million plus 50% of the amount of interest accrued on
Congoleum's 8 5/8% Senior Notes Due 2008 (the "Congoleum Senior Notes") from
December 31, 2003 through and including the effective date of the plan. Under
the proposed modified plan, the plan trust would also be funded by proceeds from
Congoleum's insurance policies. Congoleum's insurance settlements to date amount
to approximately $164 million and American Biltrite Inc. understands that
further settlements are under negotiation. The proposed modified plan of
reorganization also would provide that interest accrued on the Congoleum Senior
Notes from December 31, 2003 through and including the effective date of the
plan would be forgiven, and the maturity date of the Congoleum Senior Notes
would be extended by three years to August 1, 2011. The proposed modified plan
provides that unpaid pre-petition interest on the Congoleum Senior Notes would
be paid when the plan becomes effective.
In addition, the proposed modified plan of reorganization revises the proposed
arrangements under which different groups of asbestos claimants would share in
the insurance proceeds and other assets of the plan trust to be formed to pay
asbestos claims against Congoleum and the procedures the plan trust would follow
for payment of claims.
The foregoing description of Congoleum's proposed modified plan of
reorganization does not purport to be complete, does not address all the matters
impacting Congoleum and American Biltrite Inc. under that plan and is subject
to, and qualified in its entirety by, the Seventh Modified Joint Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code of Congoleum Corporation,
et al., dated as of February 3, 2006, and the proposed Disclosure Statement
relating thereto, copies of which are attached hereto as Exhibits 99.1 and 99.2,
respectively, and incorporated by reference herein.
On December 31, 2003, Congoleum 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 modified Chapter 11 plan of
reorganization in a timely manner or at all. Any alternative plan of
reorganization pursued by Congoleum or any other party in interest or confirmed
by the bankruptcy court could vary significantly from the version of the plan
currently being pursued by Congoleum, including with respect to the matters
described in this report, and there can be no assurance as to how the equity
interests of Congoleum, including shares of Congoleum common stock owned by
American Biltrite Inc., and American Biltrite Inc.'s intercompany arrangements
with and claims against Congoleum ultimately will be treated under any Congoleum
plan of reorganization that may be confirmed in the Chapter 11 case.
Furthermore, the estimated costs and contributions required to confirm and to
effect the proposed modified 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 Congoleum and American Biltrite Inc. for asbestos-related claims;
(iii) the costs relating to the execution and implementation of any plan of
reorganization pursued by Congoleum; (iv) timely reaching an agreement with
other creditors, or classes of creditors, that exist or may emerge; (v) American
Biltrite Inc.'s and Congoleum's satisfaction of the conditions and obligations
under their 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 Congoleum's proposed plan of
reorganization; (vi) the response from time-to-time of American Biltrite Inc.'s
and Congoleum's lenders, customers, suppliers and other constituencies to the
Chapter 11 process and related developments arising from the strategy to settle
asbestos liability; (vii) 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; (viii) timely
obtaining sufficient creditor and court approval of any reorganization plan and
the overruling by the bankruptcy court of any objections that may be filed to
3
the plan; (ix) developments in, costs associated with and the outcome of
insurance coverage litigation pending in New Jersey State Court involving
Congoleum and certain insurers; (x) developments in, and the outcome of,
proposed federal legislation that, if adopted, would establish a national trust
to provide compensation to victims of asbestos-related injuries that would be
funded in part by assessments against companies with asbestos-related
liabilities such as American Biltrite Inc. and Congoleum; and (xi) compliance
with the Bankruptcy Code, including section 524(g). In addition, in view of
American Biltrite Inc.'s relationships with Congoleum, American Biltrite Inc.
could be affected by Congoleum's negotiations, 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 its anticipated 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. In addition, any Congoleum plan of reorganization that
significantly dilutes or otherwise reduces American Biltrite Inc.'s equity
interest in Congoleum or which treats American Biltrite Inc.'s intercompany
arrangements with and claims against Congoleum in a manner adverse to American
Biltrite Inc. 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 American Biltrite Inc.'s
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, 2004 and Quarterly Report on
Form 10-Q for the quarter ended September 30, 2005.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
--------------------------------------------------------------------------------
EXHIBIT NO. DESCRIPTION
--------------------------------------------------------------------------------
99.1 Seventh Modified Joint Plan of Reorganization Under Chapter 11 of
the Bankruptcy Code of Congoleum Corporation, et al., dated as of
February 3, 2006
--------------------------------------------------------------------------------
99.2 Proposed Disclosure Statement with respect to the Seventh Modified
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code of Congoleum Corporation, et al., dated as of February 3, 2006
--------------------------------------------------------------------------------
4
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: February 9, 2006 AMERICAN BILTRITE INC.
By: /s/ Howard N. Feist III
--------------------------
Name: Howard N. Feist III
Title: Chief Financial Officer
EXHIBIT INDEX
--------------------------------------------------------------------------------
EXHIBIT NO. DESCRIPTION
--------------------------------------------------------------------------------
99.1 Seventh Modified Joint Plan of Reorganization Under Chapter 11 of
the Bankruptcy Code of Congoleum Corporation, et al., dated as of
February 3, 2006
--------------------------------------------------------------------------------
99.2 Proposed Disclosure Statement with respect to the Seventh Modified
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code of Congoleum Corporation, et al., dated as of February 3, 2006
--------------------------------------------------------------------------------