By Mike Boyer
The Cincinnati Enquirer

Formica Corp., the countertop and laminate maker started in Cincinnati 91 years ago, Tuesday won a judge's approval to emerge from bankruptcy reorganization.

The approval by U.S. Bankruptcy Judge Burton Lifland in New York means that Formica, employing about 400 at its plant in Evendale, should emerge from court protection by the end of March.

Formica also plans to relocate its 20-person corporate headquarters from Warren, N.J., to downtown Cincinnati. The company is negotiating to lease space in the Chemed building on Fifth Street, and it has applied for financial incentives from the state of Ohio.

The company hopes to win court approval for the move so it can be completed by June, a spokesman said. An Ohio Department of Development spokesman said Formica's incentives application would not be made public until a tax incentives review board votes on the package.

The bankruptcy court approval paves the way for an investment of a promised $175 million by Cerberus Capital Partners LP and Oaktree Capital Management LCC. The two, Formica's largest secured creditors, have also agreed to assume $250.5 million in Formica's debt.

"We are very pleased to obtain confirmation of the plan," John C. Burns, Formica's treasurer, told Bloomberg News.

The financing plan announced last summer would reduce the company's outstanding secured debt from more than $300 million to about $127 million, using $173 million of the $175 million cash investment.

The plan also eliminates the $215 million in pre-Chapter 11 unsecured debt.

Since June, Formica has cut about 170 jobs at the Evendale plant, including about 70 this month at an adjacent warehouse.

Frank Riddick, named CEO shortly before the company sought reorganization, said the Evendale plant's costs were about 40 percent higher than Formica's other North American operations.

The company sought Chapter 11 court protection from creditors in March 2002 under the weight of more than $540 million in debt.

A Lazard LLC study put Formica's post-bankruptcy value at $390 million to $440 million, Alan B. Miller, an attorney representing Formica, told Lifland. Owned by two groups for its first 72 years, Formica has undergone five changes in control since 1985. Riddick said the debt taken on in a 1997 management-led buyout and subsequent acquisitions was a factor in the bankruptcy filing.

About 99 percent of Formica's creditors voted in favor of the reorganization, Miller said. Unsecured creditors of more than $50,000 will receive 181/2 cents on the dollar for their claims through a combination of cash and promissory notes. Unsecured creditors under that amount will receive about 20 cents on the dollar in cash.

Enquirer reporter Ken Alltucker and Bloomberg News contributed to this report. E-mail mboyer@enquirer.com