Armstrong World Industries Inc. on Thursday said it will be "substantially delayed" in emerging from bankruptcy because a federal judge rejected its reorganization plan, calling it unfair to unsecured creditors.

The flooring, ceiling and cabinet maker, which has 44 plants and employs 15,500 people, has been operating under Chapter 11 for more than four years. It filed for protection from creditors in December 2000 after being crushed by claims related to floor tiles containing asbestos......