After filing for Chapter 11 bankruptcy earlier this month, Lancaster-based Armstrong Flooring is looking to auction its assets in a competitive bidding period next month.
The flooring designer and manufacturer filed a motion in bankruptcy court to sell some or all of its assets. Bidding for the auction would be due June 14 with the auction itself being held June 17.
A hearing on the motion is set to take place in a Delaware bankruptcy court on May 26.
As it awaits a ruling on the auction, the court approved Armstrong Flooring to access consensual debtor-in-possession financing totaling $24 million in net new money.
The financing is expected to provide the company with the liquidity it needs to continue operating as it pursues a sale.
Lenders Pathlight Capital and Bank of America are providing the $24 million. The two financial institutions previously looked to the court to deny the debtor-in-possession financing and liquidate Armstrong Flooring but have since agreed to finance the company in anticipation of a sale, according to filings.
Armstrong Flooring has also received approval for a critical vendor motion, which allows it to use $9 million of critical vendor funds to pay off certain pre-petition claims of vendors and service providers.
According to Armstrong Flooring’s filings with the court, the company began looking into selling some or all of its assets last fall after receiving indications of interest from three potential bidders.
In response, the company retained Los Angeles-based investment banking firm, Houlihan Lokey Capital, to help with the sale of the company and the consideration of other strategic options.
Today, Armstrong Flooring has two interested bidders looking to purchase undisclosed assets from the company. One of the bidders has completed the second week of its two-week diligence period and is working with Armstrong Flooring to draft a definitive purchase agreement.