CGMCQ took home the prize for the biggest daily gain on Friday. It opened the session at $.015 and reached a high of $.40. The stock traded over $700,000 worth of stock. CGMCQ soared on a press release (pasted below) stating the company had reached a settlement and expects to emerge from bankruptcy soon. The question remains: what value does CGMCQ have? In most bankruptcy cases the common equity is wiped. Perhaps this time the story has a different ending?
MERCERVILLE, NJ, Jan 29, 2010 (MARKETWIRE via COMTEX) — Congoleum Corporation (PINKSHEETS: CGMCQ) reported today that it has reached a settlement with nine insurance groups and the New Jersey insurance guaranty associations. Under the terms of the agreements, the insurance companies and the guaranty associations will pay $100 million to settle certain policies issued to Congoleum. The settlement is subject to court approval and other conditions. Roger S. Marcus, Chairman of the Board, commented, “I am absolutely thrilled to have finally resolved our disputes with the principal insurance companies that have been opposing our reorganization efforts. Their opposition has been far and away the greatest obstacle in getting a plan confirmed. With the conclusion of this substantial insurance settlement and the support for the plan that we have from all creditor committees, we expect a much smoother road ahead. While our plan still requires a formal creditor vote and other procedural steps, we fully expect to see it confirmed and have Congoleum emerge from bankruptcy in the second quarter of 2010.”
Congoleum Corporation is a leading manufacturer of resilient flooring, serving both residential and commercial markets. Its sheet, tile and plank products are available in a wide variety of designs and colors, and are used in remodeling, manufactured housing, new construction and commercial applications. The Congoleum brand name is recognized and trusted by consumers as representing a company that has been supplying attractive and durable flooring products for over a century.
The above news release contains certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks, uncertainties and assumptions. These statements can be identified by the use of the words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project” and other words of similar meaning. In particular, these include statements relating to intentions, beliefs or current expectations concerning, among other things, future performance, results of operations, the outcome of contingencies such as bankruptcy and other legal proceedings, and financial conditions. These statements do not relate strictly to historical or current facts. These forward-looking statements are based on Congoleum’s expectations, as of the date of this release, of future events, and Congoleum undertakes no obligation to update any of these forward-looking statements.
Although Congoleum believes that these expectations are based on reasonable assumptions, within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. Readers are cautioned not to place undue reliance on any forward-looking statements. Any or all of these statements may turn out to be incorrect. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements made in this press release speak only as of the date of such statement. It is not possible to predict or identify all factors that could potentially cause actual results to differ materially from expected and historical results. Factors that could cause actual results to differ …