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The sign of Armstrong Flooring at its former Dillerville Road plant. Printing Pvc Panel

The sign of Armstrong Flooring at its former Dillerville Road plant.

Armstrong Flooring is no longer in charge of its own affairs in bankruptcy court.

A Delaware bankruptcy court judge has ordered Armstrong Flooring’s bankruptcy to be converted from Chapter 11 to Chapter 7 because the U.S Trustee and a large creditor were unhappy with Armstrong’s plan for paying out remaining funds.

The change in status puts a court-appointed trustee in charge of which creditors are paid and how much.

An interim trustee has been appointed by the court to settle the Armstrong Flooring’s assets to maximize the return to Armstrong’s unsecured creditors. Armstrong Flooring had just $2 million in cash left, according to court documents, and said it was administratively insolvent. It had, however, filed legal actions to get money it said it was owed from companies it had previously done business with. 

It is not clear who will get paid until the trustee files a report. 

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The company wants to sell a 1-acre lot in Manheim Township for $295,000 to a Lancaster developer. 

It’s not likely they will see all of that money, if any.

The properties were part of a $107 million sale of all of Armstrong Flooring’s North American assets to a consortium of AHF and Boston-based liquidator Gordon Brothers Commercial & Industrial that was approved by a judge in July. The real estate transactions were posted in August. 

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