Dlubak Corp. has agreed to sell its non-real estate assets to Grey Mountain Partners Fund II LP for $2 million, with the rest of the company’s remaining assets set to go up for auction in an effort to save jobs and appease creditors, according to papers filed Friday with the U.S. Bankruptcy Court of the Western District of Pennsylvania.
The deal, which will need to be approved by the court, is the latest legal wrangling for the Dlubak Corp., the Blairsville, Pa.-based supplier of security glass and architectural flat and bent glass laminates that filed for Chapter 11 bankruptcy protection last week.
Judge Jeffrey A. Deller will hear the merits of the proposed deal in Pittsburgh beginning at 10 a.m. on Friday before making a final decision.
“This is not a process [Dlubak Corp. president Frank Dlubak] would have selected,” says company attorney Steven Shreve, “but the last three years have not been the results they would have liked.”
Pending Deller’s approval, Dlubak Corp.’s assets are set to go up for sale, including everything necessary to operate the business: machinery, vehicles, computer hardware and furnishings. Also included are all equipment and inventory, books and records, all intellectual property rights, all products in development and all cash, cash equivalents and accounts receivable, according to court records.
Shreve is hoping that other bidders besides Grey Mountain Partners might be interested as well.
“It’s a challenge to sell a company in this environment,” he says, “but there are companies who understand the strategic importance of acquiring a company like this. This [glass] industry isn’t going away. It’s just a matter of when it comes back.”
The proceeds of the sale are expected to relieve the Dlubak Corp. of “onerous secured debt,” according to papers the company filed with the court, and represents the company’s best chance “to maximize the value of its assets, save jobs and achieve the best results for stakeholders.”
Shreve filed the paperwork on behalf of Dlubak Corp., which lists more than 200 creditors, including PPG Industries, Quanex, Trulite, Intertek, Allmetal, Bayer, Bottero Inc., Bystronic, C R Laurence Co. and Glaston America Inc. among others. Chicago-based Curbell Plastics is the by far the biggest creditor, with the Dlubak Corp. owing it nearly a million dollars, according to court records.
PPG Industries (nearly $412,000) is among the seven companies overall owed more than $100,000 by the Dlubak Corp.
Dlubak Corp.’s estimated assets and estimated debts are both listed between $1 million and $10 million, according to court records.
Frank Dlubak attributed his cash-strapped company’s problems to a “substantial decrease” in sales in the three years prior to the petition filing, as well as general economic conditions and an industry-specific decline, according to court documents.
He indicated in initial court documents filed last week that, after any exempt property is excluded and administrative expenses paid, there will be no funds available for distribution to unsecured creditors.
Representatives of Grey Mountain Partners could be reached for comment.
Dlubak Corp employed roughly 200 people during the company’s zenith a few years ago and remains optimistic that no drastic changes are ahead, Shreve says.
“The hope is that [Dlubak Corp.] will continue to be an employer in the region,” he says.