The company that operates Dallas Cowboys stadium says bankrupt Armstrong Flooring Inc. owes it $1,707,628 for the remaining eight years of a 20-year lease of a suite in the stadium’s “Ring of Honor.”
The company, Cowboys Stadium, LP, is based in Frisco, Texas and filed the lawsuit against Armstrong Flooring of East Hempfield on June 29. The lawsuit was filed by Kaleisha Stuart, assistant legal counsel for the NFL team.
Armstrong Flooring’s communications team declined to comment on the allegation.
Armstrong Flooring filed for bankruptcy protection on May 8 to sell its assets as an operating company. It received court approval to sell its assets, which it values at $517 million. The sales hearing is scheduled for Thursday. Claims are examined by the insolvency court and settled with the sales proceeds. Unsecured creditors like the Cowboys fall behind secured creditors. Those secured creditors are Pathlight Capital and Bank of America NA, who say they are owed $98 million and $65 million, respectively.
The suite’s initial rental period was 20 years
According to the Cowboys’ claim, Armstrong World Industries entered into a 20-year lease in 2009 when the Cowboys moved from the now-demolished Texas Stadium in Irving to what is now AT&T Stadium in Arlington, Texas. This lease was signed by George Mitchell, then treasurer of the NFL team.
According to the Cowboys’ claim, Armstrong Flooring paid the rent for the suite, which can sleep up to 30 people.
According to the claim, as of 2019, Armstrong was paying $175,000 annually with annual increases of 3%. With an opt-out for 2020, the term was allegedly extended by another year. The company had paid $2,133,407 since 2009. The claim includes a May 24 invoice sent to Armstrong Flooring’s Brent Flaharty, senior vice president and chief of customer experience.
The claim does not indicate whether the suite was used by Armstrong Flooring employees or rented to other users. It has become more common for companies to resell unused suites for specific events through third party companies.
Armstrong’s Suite 564 is one of 60 Ring of Honor suites and is located on the south side of AT&T Stadium. These suites generally accommodate 18 to 30 guests and feature upgraded furnishings, indoor and outdoor seating, HDTVs, a private bar/kitchen area, private restroom, and the option to order in-suite catering. Ring of Honor Suites also come with a quota of VIP parking passes.
According to the lawsuit, the lease was with Armstrong World Industries, the predecessor of Armstrong Flooring. Armstrong Flooring Inc. was spun off from Armstrong World Industries in 2016. Armstrong World Industries was crossed out on the lease with Cowboy Stadium and the lease read “Armstrong Wood Products Inc. trading as Armstrong Cabinet Products”.
At the time the lease was signed, Armstrong World Industries had three businesses (Flooring, Ceilings, and Furniture). and revenue of $929.6 million, according to LNP | LancasterOnline Archive. Armstrong was one of Lancaster County’s largest employers at the time, employing approximately 2,000 local workers out of 12,300 worldwide.
The lease was signed by Robert M. Cohen, President and CEO of Armstrong Cabinet Products, based in Texas. Armstrong World Industries stopped manufacturing cabinets in 2012 when it sold its closet products division to a private equity firmAmerican Industrial Partners.
There are more than 2,300 Lawsuits against Armstrong Flooring and its affiliates. Armstrong Flooring owes its Chinese company $12.5 million and its Australian company $26.5 million. These are unsecured receivables.
Unsecured creditors outside the company ranged from Klöckner-Pentaplast of America Inc.’s highest $4.3 million claim for plastic sheeting used to manufacture luxury vinyl floors to employees who paid unspecified amounts of their employee equity retirement plan, and shareholders with as little as 10 shares.
Creditors have until August 5 to submit claims. It’s not clear who will be paid or how much money will be available to pay creditors, which will be decided by a repayment plan that has to be approved by a judge.
Check out the view from Armstrong Flooring’s suite here