Date: Wed, 6 Dec 2000 17:46:44 -0800

The following article has been sent to us by Chris. . .Thanks Chris for sending our way. 

Myrl

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Wednesday December 6 10:57 AM ET

Asbestos Sends Armstrong World to Ch. 11 

LANCASTER, Pa. (Reuters) - Armstrong Holdings Inc. (NYSE:ACK - news) said Wednesday its major operating subsidiary, Armstrong World Industries Inc., filed for voluntary reorganization under Chapter 11 of the U.S. bankruptcy code in order to resolve its asbestos liabilities. 

The Lancaster, Pa.-based maker of floor and ceiling products said cash demands of asbestos settlements now ``threaten the long-term health of its valuable and fundamentally sound businesses.'' 

But Armstrong also said its businesses were all operating as usual and suppliers would be paid on normal terms for goods delivered and services provided after the Chapter 11 filing. 

Two of Armstrong World's wholly owned subsidiaries, Nitram Liquidators Inc. and Desseaux Corp. of North America Inc., also filed for protection. Armstrong said that Triangle Pacific, WAVE and its non-U.S. businesses were not included in the filing. 

To enhance its liquidity, Armstrong said, it obtained a commitment for a $400 million debtor-in-possession facility with Chase Manhattan Bank, which was being submitted to the court for approval Wednesday. 

"Our historical approach to resolving asbestos claims has not worked," Chairman and Chief Executive Michael Lockhart said in a statement. "The actions that would now be required to wait for legislation -- for which there is no reasonable hope for quick passage -- would reduce our ability to invest in our businesses." 

Armstrong said that liquidity concerns, raised after Owens Corning (NYSE:OWC - news) voluntarily filed for reorganization under Chapter 11 in October, had begun to have an adverse impact in the marketplace. 

According to court papers, Armstrong World had $4 billion in consolidated assets as of Sept. 30, and debts of $3.3 billion. The debt includes $180 million in 7.45 percent quarterly interest bonds with more than 500 holders, according to the court papers. 

Those owning at least 5 percent of Armstrong World stock through their holdings in Armstrong Holdings are Mellon Financial Corp. (NYSE:MEL - news) with 7.05 percent; T. Rowe Price Associates Inc. (NasdaqNM:TROW - news) with 6.3 percent; Morgan Stanley Dean Witter & Co. (NYSE:MWD - news) with 7.02 percent; and J & W Seligman & Co., with 6.05 percent. A majority of Seligman's voting securities are owned by William Morris, the papers said. 

Trading of Armstrong Holdings shares was halted on Wednesday morning for news dissemination. The shares closed on Tuesday at $1-1/16, above a 52-week low of 13/16 but well off a 52-week high of $36-13/16.