Exhibit 10.1


                         UNITED STATES BANKRUPTCY COURT
                             DISTRICT OF NEW JERSEY

In re:                                    )     Chapter 11
                                          )
CONGOLEUM CORPORATION,                    )
CONGOLEUM SALES, INC. and                 )     Case No. 03-51524 (KCF)
CONGOLEUM FISCAL, INC.,                   )
                                          )     Jointly Administered
                  Debtors.                )


                 STIPULATION AND CONSENT ORDER RESOLVING DISPUTE
                        REGARDING GHR DISGORGEMENT ORDER


      Congoleum Corporation ("Congoleum"), Congoleum Sales, Inc., and Congoleum
Fiscal, Inc., the above-captioned debtors and debtors-in-possession (the
"Debtors") and Gilbert Heintz and Randolph LLP ("GHR," and collectively with the
Debtors, the "Parties"), by undersigned counsel, hereby jointly submit this
Stipulation and Consent Order Resolving Dispute Regarding GHR Disgorgement Order
("Stipulation and Consent Order"), and in support thereof state as follows:

      WHEREAS, on December 31, 2003 (the "Petition Date"), the Debtors each
filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in
the United States Bankruptcy Court for the District of New Jersey (the
"Bankruptcy Court");

      WHEREAS, the Debtors continue to manage and operate their businesses as
debtors-in-possession pursuant to section 1107 and 1108 of the Bankruptcy Code;

      WHEREAS, on or about January 27, 2006, the Official Committee of
Bondholders (the "Bondholders' Committee") was formed;
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      WHEREAS, on or about January 23, 2004, Congoleum applied to the Bankruptcy
Court for approval to retain GHR as "special insurance counsel" pursuant to
section 327(e) of the Bankruptcy Code, and certain of Congoleum's liability
insurers objected;

      WHEREAS, on or about March 2, 2004, the Bankruptcy Court entered an order
granting the retention of GHR as special counsel to the Debtors (the "Retention
Order"), and thereafter, on or about August 24, 2004, the United States District
Court for the District of New Jersey (the "District Court") affirmed the
Retention Order;

      WHEREAS, on or about October 13, 2005, the United States Court of Appeals
for the Third Circuit (the "Third Circuit") reversed the Retention Order;

      WHEREAS, on or about October 28, 2005, as a result of the opinion of the
Third Circuit, GHR sought an order authorizing the withdrawal of GHR as special
counsel to the Debtors (the "Withdrawal Motion");

      WHEREAS, in response to the Withdrawal Motion, certain insurers filed an
objection to GHR's Withdrawal Motion and Cross-Motion for Disgorgement of Fees
Paid to GHR (the "Disgorgement Motion") seeking to require GHR to disgorge all
fees and expenses paid by the bankruptcy estates to GHR from the inception of
the above captioned Chapter 11 cases;

      WHEREAS, on or about February 3, 2006, the Bondholders Committee joined in
the Disgorgement Motion;

      WHEREAS, on or about February 3, 2006, the Office of the United States
Trustee also filed a motion seeking disgorgement of fees from GHR;

      WHEREAS, on or about March 31, 2006, the Bankruptcy Court entered an
amended order granting the Disgorgement Motion (the "Disgorgement Order"),
requiring that GHR disgorge all fees and expenses paid to it in connection with
the Retention Order (including, without limitation, ordering the disgorgement of
$9,662,486.71 in connection with its First through Sixth Fee Applications, and
denying GHR's Seventh and Eighth Fee Applications totaling an additional
$3,312,151.53);


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      WHEREAS, on or about April 25, 2006, GHR appealed the Disgorgement Order
to the District Court, which appeal has been fully briefed and is currently
pending (the "Appeal");

      WHEREAS, on or about March 29, 2006, GHR filed a Motion for Stay pending
Appeal to District Court with the Bankruptcy Court, which was denied on or about
April 24, 2006;

      WHEREAS, on or about April 28, 2006, GHR filed a Motion for Stay Pending
Appeal with the District Court, which was denied on or about September 22, 2006;

      WHEREAS, on or about May 12, 2006, GHR filed an Application for
Reimbursement of Expenses, seeking reimbursement of approximately $1,459,150.55
in expenses it had paid to third parties in connection with its representation
of the Debtors (the "GHR Expense Application");

      WHEREAS, on or about May 26, 2006, the Debtors filed a Cross-Motion For
Approval of Certain Expenses seeking approval and/or authorization for the
Debtors to pay certain expenses related to the Coverage Action;

      WHEREAS, on or about May 26, 2006, the Debtors filed a Cross-Motion For
Entry of Judgment and Authorization to Register Judgment Against GHR, seeking to
enforce the Disgorgement Order and enter a judgment against GHR related thereto;

      WHEREAS, on or about July 11, 2006, certain insurers filed a Motion to
Enforce March 31, 2006 Disgorgement Order and Response to GHR's Motion for
Allowance of Expenses requesting a per diem monetary sanction for each day GHR
failed to comply with the Disgorgement Order;


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<PAGE>

      WHEREAS, GHR represents that, given GHR's current financial condition and
capital structure, GHR is unable to immediately satisfy the full amount of the
Disgorgement Order, and is unable to obtain secured or unsecured credit so as to
be in a position to fully satisfy the Disgorgement Order in the immediate
future;

      WHEREAS, the Debtors, the Bondholders' Committee and GHR have negotiated
the terms of a settlement resolving GHR's obligations arising from, and related
to, the Disgorgement Order pursuant to, and in accordance with, the terms of
this Stipulation and Consent Order;

      WHEREAS, based on the record presented to this Court, the Stipulation and
Consent Order has been negotiated in good faith and at arm's-length between the
Debtors, the Bondholders' Committee and GHR;

      WHEREAS, based on the record before this Court, the terms of this
Stipulation and Consent Order are fair and reasonable, reflect the Debtors' and
Bondholders' Committee's exercise of prudent business judgment, and are
supported by reasonably equivalent value and fair consideration; and

      WHEREAS, this Court concludes that approval and entry of this Stipulation
and Consent Order is in the best interests of the Debtors' respective estates
and their creditors.

      NOW, THEREFORE, the Debtors and GHR do AGREE, STIPULATE AND CONVENANT as
follows:

      1. The foregoing recitals are incorporated by reference into the
Stipulation and Consent Order.

      2. This Stipulation and Consent Order is hereby APPROVED in all respects.

      3. GHR is obligated to pay, and shall pay, to the bankruptcy estates, in
care of Congoleum Corporation, a total of $9,168,468.71, representing the full
amount of the Disgorgement Order less $500,000 in full settlement of the GHR
Expense Application (the "Disgorgement Amount").


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      4. The Disgorgement Amount shall be paid by GHR pursuant to, and in
accordance with this Stipulation and Consent Order and that certain promissory
note (the "Promissory Note"), note agreement (the "Note Agreement"), and
security agreement (the "Security Agreement," the Promissory Note, the Note
Agreement and the Security Agreement are collectively referred to as the
"Settlement Documents"), which are attached hereto as Exhibits 1-3 and
incorporated by reference herein.

      5. GHR and the Debtors are authorized and directed to immediately (within
five days of the Stipulation and Consent Order becoming final and
non-appealable) do and perform (to the extent not already performed) all acts,
to make, execute and deliver all Settlement Documents and related instruments
and documents (including, without limitation, the execution of all security
agreements, mortgages and financing statements), and to pay fees, which may be
reasonably required or necessary for GHR's or the Debtors' performance under the
Settlement Documents.

      6. Upon the Stipulation and Consent Order becoming final and
non-appealable, the obligations of GHR arising from the Disgorgement Order shall
be subsumed within the debt as evidenced by the Settlement Documents and shall
be satisfied pursuant to, and in accordance with, the terms of the Settlement
Documents.

      7. The Debtors' prior payment of certain Coverage Action expenses in the
amount of $22,988.00 referenced in the Cross-Motion For Approval of Certain
Expenses is approved, and the Debtors are authorized to make an outstanding
payment to FTI Consulting, Inc. ("FTI") in the amount of $327,534.44 for
expenses related to the Coverage Action. The Debtors shall make such payment to
FTI within thirty (30) days of the entry of this Stipulation and Consent Order.


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      8. Within five business days of the Stipulation and Consent Order becoming
final and non-appealable, GHR shall cause to be dismissed with prejudice all
appeals filed by GHR related to, or arising from, its request for fees and
expenses from the bankruptcy estates, including, without limitation, the
Disgorgement Order.

      9. Except as referenced in paragraph 2 above, GHR shall forego any claim
for fees and expenses incurred but not paid by the Debtors.

      10. The terms of this Stipulation and Consent Order (and the Settlement
Documents) relate only to the Disgorgement Order, and the payment of the
Disgorgement Amount, and are not intended to affect any other claims or causes
of action that the bankruptcy estates or the Debtors may have against GHR as a
result of GHR's representation of the Debtors and/or the bankruptcy estates,
including, without limitation, any malpractice or other professional liability
claims ("GHR Causes of Action").

      11. The Settlement Documents and the provisions of this Stipulation and
Consent Order shall be binding upon the Parties and their respective successors
and assigns (including any Chapter 7 or Chapter 11 trustee hereinafter appointed
or elected for the bankruptcy estates or an examiner appointed pursuant to
Section 1104 of the Bankruptcy Code) and inure to the benefit of the Parties and
their respective successors and assigns.

      12. The Parties' agreement as outlined by the Stipulation and Consent
Order is intended to be and is a voluntary compromise, settlement, and
resolution of all questions, disputes, and issues between and among the Parties
relating to GHR's obligations arising from, and related to, the Disgorgement
Order, without incurring the expense, inconvenience, and uncertainty of further
litigation. The Stipulation and Consent Order, the Settlement Documents, and any
statements made in connection with the Approval Motion, shall not be construed


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as, interpreted as, or deemed to be evidence of an admission or concession by
any of the Parties for any purpose, or deemed to constitute a waiver of any
legal position or any defenses or other rights which any of the Parties might
otherwise assert in any context. Neither the Stipulation and Consent Order, the
Settlement Documents, or any of their provisions, or any negotiations,
statements, or testimony taken in connection herewith, may be offered or
received in evidence in, or used for any other purpose in connection with, any
suit, action, or legal proceeding which any of the Parties may now have or in
the future have with any other Person, except in connection with any action or
legal proceeding to enforce the Stipulation and Consent Order (or related
Settlement Documents).

      13. The Settlement Documents shall supersede and govern the agreement of
the Parties to the extent that such terms are inconsistent with this Stipulation
and Consent Order.

      14. This Stipulation and Consent Order may be signed in any number of
counterparts, and by different parties in separate counterparts, each of which
shall be deemed an original, but which together shall constitute one and the
same agreement. Facsimile signatures to this Stipulation and Consent Order shall
be effective as originals.

SEEN AND AGREED TO BY:

OKIN, HOLLANDER & DELUCA, LLP            GILBERT HEINTZ & RANDOLPH LLP

By: s/PAUL S. HOLLANDER                  By: s/CRAIG LITHERLAND
    --------------------------               ------------------
Paul S. Hollander                        Craig Litherland
James J. DeLuca                          1100 New York Avenue, Suite 700
Parker Plaza                             Washington, D.C. 20005
400 Kelby Street
Fort Lee, New Jersey 07024


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<PAGE>

and

PILLSBURY WINTHROP SHAW PITTMAN LLP
Richard L. Epling
Kerry A. Brennan
1540 Broadway
New York, NY 10036-4039

Attorneys For Congoleum Corporation,
Congoleum Fiscal, Inc. and Congoleum
Sales, Inc.


      IT IS, THIS 5TH DAY OF APRIL, 2007, BY THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW JERSEY, SO ORDERED THAT THE STIPULATION AND CONSENT
ORDER IS APPROVED.

                                  END OF ORDER


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