Item 1.01 Entry into a Material Definitive Agreement
The information set forth below under Item 1.03 of this Current Report on Form 8-K regarding the DIP Credit Agreement (as defined below) is incorporated herein by reference.
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Item 1.03 Bankruptcy or Receivership
Chapter 11 Filing
As previously disclosed, on
Additional information about the Chapter 11 Cases, including access to Court
documents, is available online at
https://dm.epiq11.com/case/armstrongflooring/dockets, a website administered by
Debtor-In-Possession Financing
On
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to stakeholders.
The obligations of the DIP Loan Parties under the DIP Credit Agreement will have priority over all other allowed Chapter 11 or Chapter 7 administrative expenses under the Bankruptcy Code, subject to a carveout as specified in any interim or final order entered by the Court approving or authorizing the Company's entry into and performance under the DIP Credit Agreement (the "DIP Orders"). The obligations of the DIP Loan Parties under the DIP Credit Agreement shall be secured by a super-priority priming lien and security interest in substantially all of the assets of the DIP Loan Parties (the "DIP Collateral") pursuant to the DIP Credit Agreement and the DIP Orders, subject to certain exceptions and having the priorities set forth in the DIP Orders. Pursuant to the DIP Orders, the security interests granted in the DIP Collateral in connection with the DIP Credit Agreement will prime and be given priority over the prepetition liens granted under the Prepetition Credit Facilities (as defined below).
The proceeds of the DIP Facility will be used by the DIP Loan Parties, as permitted by the DIP Orders and the DIP Credit Agreement, for working capital and general corporate purposes, the payment of fees and expenses in connection with the transactions related thereto, the pursuit of sale transactions, and bankruptcy-related costs and expenses in accordance with the approved budget.
The DIP Facility matures 60 days after the Petition Date and is subject to one 30-day extension at the Company's request absent the occurrence of an event of default under the DIP Credit Agreement and related loan documents.
Borrowings under the DIP Credit Agreement will bear interest at a rate per annum on the daily balance equal to 10.0% (increased to 15.0% upon the occurrence of an event of default).
Subject to certain conditions, the Company is required to pay to the DIP Lenders . . .
Item 2.03 Creation of a Direct Financial Obligation or Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.03 of this Form 8-K regarding the DIP Credit Agreement is incorporated herein by reference. The Company's obligations under the DIP Credit Agreement are subject to Court approval.
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Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet Arrangement
The commencement of the Chapter 11 Cases described in Item 1.03 above constitutes an event of default that accelerated the Company's obligations under the following debt instruments (the "Prepetition Credit Facilities"):
• Credit Agreement, dated as ofDecember 31, 2018 (as amended or supplemented from time to time), by and among the Company, as borrower, the guarantors named therein, the lenders party thereto andBank of America, N.A ., as administrative agent and collateral agent, as Australian security trustee and as letter of credit issuer and as swingline lender; and • Term Loan Agreement, dated as ofJune 23, 2020 (as amended or supplemented from time to time), by and among the Company andArmstrong Flooring Pty Ltd , as borrowers, the guarantors named therein, the lenders party thereto andPathlight Capital LP , as administrative agent, collateral agent and Australian security trustee.
The Prepetition Credit Facilities provide that, as a result of the commencement of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable.
Any efforts to enforce the payment obligations under the Prepetition Credit Facilities are automatically stayed as a result of the Chapter 11 Cases, and the creditors' rights of enforcement in respect of the Prepetition Credit Facilities are subject to the applicable provisions of the Bankruptcy Code.
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Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On
NYSE Regulation reached its decision that the Company is no longer suitable for
listing pursuant to NYSE Listed Company Manual Section 802.01D after the Company
filed petitions for relief under chapter 11 of the Bankruptcy Code in the Court
on
Under NYSE delisting procedures, the Company has the right to appeal this determination. The Company is currently considering whether to appeal the delisting decision, and will make that determination prior to the expiration of the appeal period.
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Cautionary Information Regarding Trading in the Company's Securities.
The Company continues to face certain risks and uncertainties that have been affecting its business and operations, and these risks and uncertainties could impact the outcome of the Chapter 11 Cases. Holders of the Company's equity securities will likely be entitled to little or no recovery on their investment following the Chapter 11 Cases, and recoveries to other stakeholders cannot be determined at this time. The Company cautions that trading in the Company's securities given the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company's securities may bear little or no relationship to the actual value realized, if any, by holders of the Company's securities in the Chapter 11 Cases. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits Exhibit No. Description 10.1 Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement, by and among the Company, as borrower, the guarantors named therein, the lenders from time to time party thereto andJMB Capital Partners Lending, LLC , as administrative agent 104 Cover Page Interactive Data File (formatted as inline XBRL) 10
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