Congoleum is a Mercerville, New Jersey floor covering company that used to manufacture and sell asbestos containing products. Asbestos is a mineral that was once added to many construction products, including floor tiles, due to its thermal and insulating properties. Asbestos is now known to cause serious diseases, such as mesothelioma, an incurable cancer, and asbestosis, a hardening of the lungs. Many who worked around or came into contact with asbestos became ill and filed lawsuits against the manufacturing companies, who knew of the dangers yet did not put warnings or offer protection.
Congoleum was one of those manufacturers. The company filed for Chapter 11 bankruptcy protection in federal bankruptcy court in 2003. Despite holding about $1 billion of liability coverage, Congoleum said it was pushed to file for bankruptcy after its insurers legally challenged having to cover the liability, which ultimately grew to about 200,000 individuals with some asbestos lawsuits being brought by mesothelioma victims.
A Trenton court has now accepted the Congoleum’s plan of reorganization. Under the plan, a trust will be set up to settle asbestos claims and will get a little more than 50 percent of the equity in the reorganized company, while bondholders will get the remainder. The value of the reorganized company will be officially determined later.