Warren, N.J.—In order to facilitate a restructuring of the company, Formica Corp. and its U.S. subsidiaries and parent companies have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern Dis-trict of New York. The company’s subsidiaries outside of the United States are not part of the filing and it is not anticipated that they will be affected by the filing.

Credit Suisse First Boston Private Equity, the majority shareholder of Formica Corp.’s parent company, Laminates Acquisition Co., has proposed a restructuring plan to the secured lender bank group under which it would invest an additional $51,000,000 as part of a proposed $100,000,000 investment proposal to pay down the senior secured credit facility. Under the terms of this proposal, secured debt and trade claims would be substantially unimpaired. However, no provision will be made for distribution to senior subordinated notes, preferred stock or common stockholders under the restructuring. The secured lender bank group is considering the proposed restructuring plan.

Frank Riddick, president and CEO of Formica, noted that the company’s operations will continue as usual, without interruption, during the restructuring process. “The restructuring will have no impact on our ability to fulfill our obligations to our employees or to our customers. During the restructuring period and beyond, we will continue to deliver the highest quality products to our customers, on time, to invest in new product and technology, and develop new business,” he said. “Our vendors will be paid in the ordinary course for all goods furnished and services rendered subsequent to the filing.” Regarding the performance of the company’s flooring operations, Riddick noted, it had very little to do, if anything, with Formica Corp.’s filing and, he sees no negative impact to the flooring operation as a result of the filing.

“The Chapter 11 filing has no real negative affect on the flooring business,” he explained, “if anything, getting the debt issue resolved and getting the liquidity through this short-term financing that we have will be a positive. It will give us more resources to keep driving to where we want to go in the floor covering business. As a part of the Chapter 11 filing, customer issues such as rebates and warranties will be honored—it won’t have any affect on the flooring customers at all.” Riddick, who joined the company as president and CEO in January of this year (FCNews, Jan. 7/14), emphasized that the manufacturer’s operations outside the United States have been excluded from the filing, and thus, there will be no impact on their ability to continue to manufacture product and meet the needs of customers, employees and suppliers. “Like many other companies, Formica has been confronted with serious external and internal challenges,” he explained. “We have made significant progress in this difficult environment to strengthen the company, and the important action we have taken will enable us to reduce our company’s burdensome loan obligations and related interest expense, strengthen our balance sheet, invest more of the company’s resources in growing and improving the business and compete more effectively. We are confident Formica will emerge from this process as an improved business. “Formica has a brand that is truly an American icon,” Riddick added, “and it has the designs, innovative products and dedicated employees to propel its growth. In the brief period that I have been at the helm, my initial impression has been confirmed repeatedly that we have a great company with strong prospects.

The action announced will allow us to focus on our strategic initiatives and expand our ability to provide our customers with the best products in the marketplace.” The entities included in the filing are: Laminates Acquisition Co., FM Holdings, Formica Corp., STEL Industries, Wilon Corp., Wildon Industries, Design Communications International, The Diller Corp., Formica International Corp. (USA), and Unidur (USA). Excluded entities are all foreign operating and holding companies in Canada, Mexico, Brazil, Europe and Asia. —Louis Iannaco