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March 13, 2009 |
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ASBESTOS LITIGATION: Armstrong World Facing 9 Workers' Claims Armstrong World Industries, Inc. has nine pending asbestos- related workers' compensation claims, and a subsidiary in the United Kingdom has 11 employer liability claims involving alleged asbestos exposure, according to the Company's 2008 annual report filed with the Securities and Exchange Commission. On Oct. 2, 2006, the Company's plan of reorganization, which was confirmed by order dated Aug. 18, 2006, became effective, and the Company emerged from Chapter 11. Before Dec. 6, 2000, the Company had been named as a defendant in personal injury cases and property damage cases related to asbestos-containing products. On Dec. 6, 2000, the Company filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code to use the court-supervised reorganization process to achieve a resolution of the Company's asbestos- related liability. Two of the Company' domestic subsidiaries also commenced Chapter 11 proceedings at the time of the Filing. The Company's other direct and indirect subsidiaries and affiliates, including Armstrong Wood Products Inc. (formerly Triangle Pacific Corp.), WAVE (Armstrong's ceiling grid systems joint venture with Worthington Industries, Inc.), Armstrong Canada and Armstrong DLW AG were not a part of the Filing and accordingly the liabilities, including asbestos-related liability if any, of those companies arising out of their own activities were not resolved in the Company's Chapter 11 Case except for any asbestos-related liability that also relates, directly or indirectly, to the pre-Filing activities of the Company. Upon the Company's Plan becoming effective on Oct. 2, 2006, the Asbestos PI Trust was created for the purpose of addressing and resolving the Company's personal injury (including wrongful death) asbestos-related liability. As of Oct. 2, 2006, all present and future asbestos-related personal injury claims against the Company, including contribution claims of co- defendants, arising directly or indirectly out of the Company's pre-Filing use of or other activities involving asbestos were channeled to the Asbestos PI Trust. The Company has no recorded liability for asbestos-related personal injury claims as of Dec. 31, 2008 and Dec. 31, 2007. On Oct. 2, 2006, under the Plan becoming effective, the Company transferred to the Asbestos PI Trust rights arising under liability insurance policies issued to the Company with respect to asbestos-related personal injury claims. As of Oct. 2, 2006, resolution of asbestos-related personal injury insurance matters is the responsibility of the Asbestos PI Trust. As part of accounting for emergence, AWI reflected the transfer of these rights to the Asbestos PI Trust. Therefore, there is no recorded insurance asset in respect of asbestos claims as of Dec. 31, 2008 and Dec. 31, 2007. Asbestos-related personal injury claims against the affiliates and subsidiaries of AWI covered by the POR will be channeled to the Asbestos PI Trust to the extent those claims directly or indirectly relate to the manufacturing, installation, distribution or other activities of the Company or are based solely on its ownership of the subsidiaries or other affiliates. Currently, one asbestos-related personal injury lawsuit against a subsidiary of the Company allegedly arising out of those independent activities is pending. This claim will not be channeled to the Asbestos PI Trust under the Plan. The subsidiary denies liability and is aggressively defending the matter. In addition, workers' compensation claims brought against the Company or its subsidiaries or other affiliates will not be channeled to the Asbestos PI Trust. These claims remain subject to the workers' compensation process. Headquartered in Lancaster, Pa., Armstrong World Industries, Inc. produces flooring products and ceiling systems for use primarily in the construction and renovation of commercial, institutional and residential buildings. The Company also designs, manufactures and sells kitchen and bathroom cabinets in the United States. |
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