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) May 3, 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 May 3, 2006, American Biltrite Inc.'s majority-owned subsidiary Congoleum
Corporation ("Congoleum") filed a motion seeking the approval of the Bankruptcy
Court for the District of New Jersey (the "Bankruptcy Court") for a settlement
agreement with Travelers Casualty and Surety Company and St. Paul Fire and
Marine Insurance Company ("Travelers"). American Biltrite Inc. is also a
signatory to this settlement. Under the terms of the settlement, Travelers will
pay $25 million in two installments over thirteen months to the trust for
asbestos claimants to be formed upon confirmation of Congoleum's plan of
reorganization once a plan of reorganization providing for the Section 524(g)
protection specified in the settlement agreement becomes effective and the
Bankruptcy Court approves the transfer of the funds by Travelers.
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 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, including with respect to the matters described 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,
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 an agreement with other
creditors, or classes of creditors, that exist or may emerge; (v) satisfaction
of the conditions and obligations under the 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; (vii) 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;
(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 of any 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 personal injury claims may have American
Biltrite Inc.'s and Congoleum's businesses, results of operations or financial
conditions; (xiii) compliance with the 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 and its subsequent
filings.
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: May 9, 2006 AMERICAN BILTRITE INC.
By: /s/ Howard N. Feist III
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Name: Howard N. Feist III
Title: Chief Financial Officer