Armstrong Flooring receives approval for additional financing
May 19, 2022 | 9:58 am CDT
Armstrong Flooring

LANCASTER, Pa. -- Armstrong Flooring Inc. received approval on May 17 from the U.S. Bankruptcy Court for the District of Delaware to access its consensual debtor-in-possession financing totaling $24 million in net new money. According to a company statement, the financing will provide the company with the liquidity to continue operating in the ordinary course as it pursues a "swift, value-maximizing sale process."

The company filed bankruptcy papers on May 8 citing continuing supply chain challenges and other pandemic-related issues. The Chapter 11 filing is part of the company's efforts to sell the flooring giant.

The company said the DIP financing consists of an asset-based revolving credit facility and a term loan facility. The financing is being provided by the Company’s pre-petition lenders, which include Bank of America, other institutional lenders, and affiliates of Pathlight Capital LP. The Bank of America and Pathlight, respectively, will act as administrative agents and collateral agents under the plan.

The company also received approval of its Critical Vendor Motion, which authorizes the company to use $9 million of the $14 million requested. The remaining $5 million will be up for approval by the Bankruptcy Court on June 3, 2022. The $14 million of Critical Vendor funds are available for the payment of certain pre-petition claims of vendors and service providers whose goods and services are critical to its operations and who generally do not have existing contracts to supply.

These approvals come after a prior hearing where the Company received approval for other customary relief to support ordinary-course operations, including continuing employee wages and certain benefit programs, paying certain pre-petition claims of shippers and warehousemen, and honoring customer programs in the ordinary course of business.

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