From our private database of 35,600+ case briefs...
In re Armstrong World Industries, Inc.
United States Court of Appeals for the Third Circuit
432 F.3d 507 (2005)
Manufacturer Armstrong World Industries, Inc. (AWI) and subsidiaries (debtors) filed for bankruptcy reorganization because of asbestos liabilities. AWI proposed a plan with unsecured creditors in Class 6, asbestos claimants in Class 7, and AWI’s parent and only equity stakeholder Armstrong Worldwide, Inc. (AWWD), in Class 12. The plan would impair all three classes by altering their claims or interests. AWI had to place $1.8 billion in an asbestos-claim trust and issue AWWD warrants worth $35 to $40 million to purchase AWI’s new common stock. If Class 6 rejected the plan, Class 7 would receive but automatically waive receipt of the warrants such that they issued to AWWD. AWI claimed the warrants were consideration for settlement of about $12 million worth of intercompany debts instead of for equity interests. Unsecured creditors objected under the absolute-priority rule and because proposed federal legislation to relieve asbestos liability would free up about $1 billion the plan designated for asbestos claimants for other creditors. The bankruptcy court recommended confirmation, but the district court refused under the absolute-priority rule. AWI and asbestos-claimant representatives appealed on multiple grounds, including that the circumstances warranted an equitable exception to the rule.
Rule of Law
Holding and Reasoning (Thompson, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 620,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 620,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 35,600 briefs, keyed to 984 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.