Exhibit 99.4
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re )
)
)
ARMSTRONG WORLD INDUSTRIES, ) Chapter 11
INC., et al., ) Case No. 00-4471 (RJN)
) (Jointly Administered)
Debtors )
- ------------------------------------- )
EXHIBIT 1.39
FORM OF ARMSTRONG WORLD INDUSTRIES, INC.
AMENDED CLAIMS SETTLEMENT PROCEDURES
ARMSTRONG WORLD INDUSTRIES, INC.
AMENDED CLAIMS SETTLEMENT PROCEDURES
The Armstrong World Industries, Inc. Amended Claims Settlement Procedures (the
"CSP") contained herein provide a mechanism for resolving all claims, other than
Asbestos Personal Injury Claims and Asbestos Property Damage Claims (as such
terms are defined in the Fourth Amended Plan of Reorganization of Armstrong
World Industries, Inc. (as hereafter amended or modified, the "PLAN")) that have
been filed against Armstrong World Industries, Inc. ("AWI") in its chapter 11
case. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Plan.
SECTION I -
INTRODUCTION
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1.1 EFFECTIVENESS OF THE CSP. This CSP will become effective upon the
occurrence of the Effective Date and, except with respect to Nitram and
Desseaux, will amend and supersede the Order Granting Motion of the Debtors for
Order Pursuant to Section 105(a) of the Bankruptcy Code and Bankruptcy Rule
9019(b) Authorizing the Establishment of Procedures to Settle Certain
Prepetition Claims Against the Debtors' Estates, dated May 31, 2002. Such order
shall remain fully applicable with respect to Nitram and Desseaux, and this CSP
shall have no effect as to Nitram and Desseaux.
1.2 INTERPRETATION. Nothing in this CSP shall be deemed to create a
substantive right for any claimant. Nothing in this CSP shall obligate or
require Reorganized AWI to compromise and settle any Claims that it does not
consider, in its sole discretion, appropriate to compromise and settle, and this
CSP shall not obligate or require Reorganized AWI to compromise and settle any
Claims in amounts in excess of the amounts that AWI, in its sole discretion,
believes to be reasonable and appropriate. Nothing in this CSP shall affect the
right of Reorganized AWI to object to any Claim on any ground whatsoever,
including, without limitation, on the ground that such Claim was untimely or was
discharged as a result of the confirmation of the Plan.
SECTION II -
CLAIM SETTLEMENTS NOT REQUIRING APPROVAL UNDER THIS CSP
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2.1 ADMINISTRATIVE EXPENSES. Reorganized AWI shall not be required to
obtain any approval of the Bankruptcy Court, or obtain any approval of or
provide notice to any party in interest, to compromise and settle any
Administrative Expenses that have not been Allowed as of the Effective Date, and
any such compromise and settlement shall be deemed to have been authorized by
1.39-2
the Bankruptcy Court; provided, however, that the allowance of fees and expenses
of professionals through the Confirmation Date shall, as set forth more fully in
the Plan and the Confirmation Order, be subject to the approval of the
Bankruptcy Court.
2.2 AFFILIATE CLAIMS. Reorganized AWI shall not be required to obtain
any approval of the Bankruptcy Court, or obtain any approval of or provide
notice to any party in interest, to compromise and settle any Affiliate Claims,
and any compromise and settlement of Affiliate Claims shall be deemed to have
been authorized by the Bankruptcy Court.
2.3 SECURED CLAIMS. Reorganized AWI shall not be required to obtain
any approval of the Bankruptcy Court, or obtain any approval of or provide
notice to any party in interest, to compromise and settle any Secured Claims,
and any compromise and settlement of Secured Claims shall be deemed to have been
authorized by the Bankruptcy Court.
2.4 PRIORITY CLAIMS. Reorganized AWI shall not be required to obtain
any approval of the Bankruptcy Court, or obtain any approval of or provide
notice to any party in interest, to compromise and settle any Priority Claims,
and any compromise and settlement of Priority Claims shall be deemed to have
been authorized by the Bankruptcy Court.
2.5 CONVENIENCE CLAIMS. Reorganized AWI shall not be required to
obtain any approval of the Bankruptcy Court, or obtain any approval of or
provide notice to any party in interest, to compromise and settle any
Convenience Claims, and any compromise and settlement of Convenience Claims
shall be deemed to have been authorized by the Bankruptcy Court.
2.6 EMPLOYEE BENEFIT CLAIMS. Reorganized AWI shall not be required to
obtain any approval of the Bankruptcy Court, or obtain any approval of or
provide notice to any party in interest, to compromise and settle any Employee
Benefit Claims, and any compromise and settlement of Employee Benefit Claims
shall be deemed to have been authorized by the Bankruptcy Court.
2.7 ENVIRONMENTAL CLAIMS. From and after the Final Distribution Date,
Reorganized AWI shall not be required to obtain any approval of the Bankruptcy
Court, or obtain any approval of or provide notice to any party in interest, to
compromise and settle any Environmental Claim, and any compromise and settlement
of Environmental Claims shall be deemed to have been authorized by the
Bankruptcy Court. Prior to the Final Distribution Date, an Environmental Claim
shall be considered a General Claim (as hereinafter defined) for purposes of
this CSP.
2.8 CLAIMS OR CAUSES OF ACTION ASSERTED BY AWI AGAINST ANY ENTITY.
Reorganized AWI shall not be required to obtain any approval of the Bankruptcy
Court, or obtain any approval of or provide notice to any party in interest, to
compromise and settle any claim or cause of action brought by AWI against any
Entity and pending as of the Effective Date, and any such compromise and
settlement shall be deemed to have been authorized by the Bankruptcy Court.
1.39-3
SECTION III -
SETTLEMENT OF EMPLOYEE LITIGATION CLAIMS
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3.1 EMPLOYEE LITIGATION CLAIMS. "EMPLOYEE LITIGATION CLAIMS" shall
mean Claims asserted against AWI's estate by current or former employees for
alleged wrongful termination or other contractual, statutory, and tort-based
employment claims allegedly occurring prior to the Commencement Date other than
Claims for workers' compensation or for employee or retiree benefits.
3.2 SETTLEMENT PROCEDURES FOR EMPLOYEE LITIGATION CLAIMS. Reorganized
AWI shall be authorized to compromise and settle any Employee Litigation Claim
in the manner described below:
(a) Reorganized AWI may enter into a compromise and settlement of
any Employee Litigation Claim for a cash payment not to exceed $75,000 per
claimant or an allowed prepetition, unsecured claim not to exceed $50,000 per
claimant without further approval or order of the Bankruptcy Court or approval
of or notice to any other party in interest, and Reorganized AWI shall be deemed
to have been authorized by the Bankruptcy Court to enter into any such
compromise and settlement
(b) For settlements of Employee Litigation Claims where (i) the
proposed cash payment per claimant is greater than $75,000, or (ii) the proposed
allowed, unsecured, prepetition claim is greater than $50,000, Reorganized AWI
will submit the proposed settlement to a designated representative of the
Unsecured Creditors' Committee (the "DESIGNATED COMMITTEE REPRESENTATIVE"),
together with (i) the name of the other party to the settlement, (ii) a summary
of the dispute with such other party, including a statement of the settlement
amount and the basis for the controversy, (iii) an explanation of why the
settlement of such Employee Litigation Claim is favorable to AWI, its estate,
and its creditors, and (iv) a copy of any proposed settlement agreement (the
"EMPLOYEE LITIGATION SETTLEMENT SUMMARY"). The Designated Committee
Representative will be required to submit to Reorganized AWI any objections to
the proposed settlement reflected on an Employee Litigation Settlement Summary
on or before ten (10) Business Days after service of such Employee Litigation
Settlement Summary. In the event that the Designated Committee Representative
objects to the settlement set forth in the Employee Litigation Settlement
Summary, Reorganized AWI may (i) seek to renegotiate the proposed settlement and
may submit a revised Employee Litigation Settlement Summary in connection
therewith or (ii) file a motion with the Bankruptcy Court seeking approval of
the proposed settlement. If the Designated Committee Representative does not
timely object to the proposed settlement, then Reorganized AWI will be deemed,
without further order of the Bankruptcy Court, to be authorized by the
Bankruptcy Court to enter into an agreement to compromise and settle the
Employee Litigation Claim at issue as provided in the Employee Litigation
Settlement Summary previously submitted to the Designated Committee
Representative.
1.39-4
SECTION IV -
SETTLEMENT OF TAX CLAIMS
------------------------
4.1 TAX CLAIMS. As used in this CSP, a "TAX REFUND CLAIM" shall be
any claim by AWI against a federal, state, county, or city taxing authority (a
"TAXING AUTHORITY") for a refund of the overpayment and/or interest payments for
any tax period, and a "TAX ASSESSMENT CLAIM" shall be any Claim by a Taxing
Authority against AWI relating to any period prior to the Commencement Date.
4.2 SETTLEMENT PROCEDURES FOR TAX ASSESSMENT CLAIMS. Reorganized AWI
will resolve Tax Assessment Claims pursuant as set forth below.
(a) With respect to any Tax Assessment Claim that is a Secured
Claim or a Priority Tax Claim, Reorganized AWI may enter into a compromise and
settlement of any such Tax Assessment Claim without further approval or order of
the Bankruptcy Court, or approval of or notice to any other party in interest,
and Reorganized AWI shall be deemed to have been authorized by the Bankruptcy
Court to enter into any such compromise and settlement.
(b) With respect to any Tax Assessment Claim that is not a
Secured Claim or a Priority Tax Claim and is asserted by a Taxing Authority
other than the Internal Revenue Service:
o Reorganized AWI shall be authorized to compromise and settle
any such Tax Assessment Claim whenever the proposed
settlement amount for such Tax Assessment Claim, net of any
Tax Refund Claims offset against such settlement amount
(such net amount, the "TAX ASSESSMENT SETTLEMENT AMOUNT") is
less than or equal to $500,000 without further approval or
order of the Bankruptcy Court, or approval of or notice to
any other party in interest, and Reorganized AWI shall be
deemed to have been authorized by the Bankruptcy Court to
enter into any such compromise and settlement.
o With respect to any such Tax Assessment Claim where the Tax
Assessment Settlement Amount is greater than $500,000 but
less than $10,000,000, Reorganized AWI will submit the
proposed compromise and settlement to the Designated
Committee Representative together with (i) the name of the
taxing authority, (ii) a summary of the dispute with the
taxing authority, including the basis for the controversy,
and (iii) an explanation of why the settlement of such Tax
1.39-5
Assessment Claim is favorable to AWI, its estate, and its
creditors (the "TAX ASSESSMENT SETTLEMENT SUMMARY"). The
Designated Committee Representative will be required to
submit to Reorganized AWI any objections to the Tax
Assessment Settlement Amount on or before ten (10) Business
Days after service of such Tax Assessment Settlement
Summary. In the event that the Designated Committee
Representative objects to the settlement set forth in the
Tax Assessment Settlement Summary, Reorganized AWI may (i)
seek to renegotiate the proposed settlement and will submit
a revised Tax Assessment Settlement Summary in connection
therewith or (ii) file a motion with the Bankruptcy Court
seeking approval of the proposed settlement of the Tax
Assessment Claim. If the Designated Committee Representative
does not timely object to the proposed settlement, then
Reorganized AWI will be deemed, without further order of the
Bankruptcy Court, to be authorized to enter into an
agreement to compromise and settle the Tax Assessment Claim
at issue for the settlement amount previously submitted to
the Designated Committee Representative in the Tax
Assessment Settlement Summary.
o With respect to any such Tax Assessment Claim where the Tax
Assessment Settlement Amount is equal to or greater than
$10,000,000, Reorganized AWI will be required to file a
motion with the Bankruptcy Court requesting approval of such
compromise and settlement under Bankruptcy Rule 9019.
(c) With respect to any Tax Assessment Claim that is not a Secured
Claim or a Priority Tax Claim and is asserted by the Internal Revenue Service:
o Reorganized AWI shall be authorized to compromise and settle
any such Tax Assessment Claim for each three (3) year audit
period whenever the aggregate Tax Assessment Settlement
Amount for such Tax Assessment Claim is less than or equal
to $5,000,000 without further approval or order of the
Bankruptcy Court, or approval of or notice to any other
party in interest, and Reorganized AWI shall be deemed to
have been authorized by the Bankruptcy Court to enter into
any such compromise and settlement.
o With respect to any such Tax Assessment Claim for each three
(3) year audit period where the aggregate Tax Assessment
Settlement Amount for such Tax Assessment Claim is greater
than $5,000,000 but less than $10,000,000, Reorganized AWI
will submit the proposed compromise and settlement to the
Designated Committee Representative together with the Tax
Assessment Settlement Summary as described in subparagraph
1.39-6
(a) above. The Designated Committee Representative will be
required to submit to Reorganized AWI any objections to the
Tax Assessment Settlement Amount on or before ten (10)
Business Days after service of such Tax Assessment
Settlement Summary. In the event that the Designated
Committee Representative objects to the settlement set forth
in the Tax Assessment Settlement Summary, Reorganized AWI
may (i) seek to renegotiate the proposed settlement and will
submit a revised Tax Assessment Settlement Summary in
connection therewith or (ii) file a motion with the
Bankruptcy Court seeking approval of the proposed settlement
of the Tax Assessment Claims. If the Designated Committee
Representative does not timely object to the proposed
settlement, then Reorganized AWI will be deemed, without
further order of the Bankruptcy Court, to be authorized to
enter into an agreement to compromise and settle the Tax
Assessment Claim at issue for the settlement amount
previously submitted to the Designated Committee
Representative in the Tax Assessment Settlement Summary.
o With respect to any Tax Assessment Claim for each three (3)
year audit period where the aggregate Tax Assessment
Settlement Amount is greater than or equal to $10,000,000,
Reorganized AWI will be required to file a motion with the
Bankruptcy Court requesting approval of the compromise and
settlement under Bankruptcy Rule 9019.
4.3 SETTLEMENT OF TAX REFUND CLAIMS. Reorganized AWI shall not be
required to obtain any approval of the Bankruptcy Court, or obtain any approval
of or provide notice to any party in interest, to compromise and settle any Tax
Refund Claims, of Tax Refund Claims shall be deemed to have been authorized by
the Bankruptcy Court.
SECTION V -
REMAINING UNSECURED CLAIMS
--------------------------
5.1 GENERAL CLAIMS. With respect to all other types of Claims other
than Priority Claims, Secured Claims, Affiliate Claims, Convenience Claims,
Employee Litigation Claims, Tax Assessment Claims, Employee Benefit Claims,
Asbestos Property Damage Claims, and Asbestos Personal Injury Claims
(collectively, "GENERAL CLAIMS"), Reorganized AWI will settle such Claims as set
forth below based upon the difference between (i) the amount of the General
Claim as scheduled on the Schedules ("AWI'S AMOUNT") and (ii) the proposed
amount of the allowed claim for which AWI is seeking to compromise and settle
such General Claim (the "SETTLEMENT AMOUNT"). If a General Claim was not
scheduled by AWI or was scheduled as contingent or unliquidated, AWI's Amount
shall be $0. Under this method, the difference between the Settlement Amount and
AWI's Amount will be referred to as the "DOCUMENTED DIFFERENCE."
1.39-7
(a) Reorganized AWI will be authorized to compromise and settle a
General Claim whenever the Documented Difference is less than $100,000 without
further approval or order of the Bankruptcy Court, or approval of or notice to
any other party in interest, and Reorganized AWI shall be deemed to have been
authorized by the Bankruptcy Court to enter into any such compromise and
settlement.
(b) If Reorganized AWI wishes to compromise and settle a General
Claim where the Documented Difference is over $100,000 but less than
$10,000,000, Reorganized AWI will submit the Settlement Amount to the Designated
Committee Representative together with (i) the name of the other party to the
settlement, (ii) a summary of the dispute with such other party, including a
statement of AWI's Amount and the basis for the controversy, (iii) an
explanation of why the settlement of such General Claim is favorable to AWI, its
estate, and its creditors, and (iv) a copy of any proposed settlement agreement
(the "GENERAL CLAIM SETTLEMENT SUMMARY"). The Designated Committee
Representative will be required to submit to Reorganized AWI any objections to a
proposed settlement reflected on a General Claim Settlement Summary on or before
ten (10) Business Days after service of such General Claim Settlement Summary.
In the event that the Designated Committee Representative objects to the
settlement set forth in the General Claim Settlement Summary, Reorganized AWI
may (i) seek to renegotiate the proposed settlement and may submit a revised
General Claim Settlement Summary in connection therewith or (ii) file a motion
with the Bankruptcy Court seeking approval of the proposed settlement. If the
Designated Committee Representative does not timely object to the proposed
settlement, then Reorganized AWI will be deemed, without further order of the
Bankruptcy Court, to be authorized to enter into an agreement to compromise and
settle the General Claim at issue for the settlement amount previously submitted
to the Designated Committee Representative in the General Claim Settlement
Summary.
(c) For each General Claim asserted against AWI where the
Documented Difference is greater than or equal to $10,000,000, AWI will be
required to file a motion with the Bankruptcy Court requesting approval of the
compromise and settlement under Bankruptcy Rule 9019.
1.39-8