A federal judge on Wednesday formally approved of the sale of Dlubak Corp.’s non-real estate assets to Grey Mountain Partners Fund II LP.
Judge Jeffrey A. Deller wrote that his decision to officially okay the transaction that had initially been agreed upon on Monday by all parties involved was “in the best interest of the debtor, its estate, creditors and other parties-in-interest,” according to papers filed with the U.S. Bankruptcy Court of the Western District of Pennsylvania.
A Colorado-based private equity firm, Grey Mountain Partners Fund II LP outlasted Secaucus, N.J.-based General Glass International (GGI) and Oran Safety Glass (OSG) during Monday’s auction in Pittsburgh with a bid of $3.25 million.
As additional terms of the deal, Grey Mountain Partners has agreed to extend the contracts for Dlubak Corp.’s union employees for 90 days and to pay an additional $130,000 for all the accrued vacation for union members.
The deal figures to result in a pot of “$400,000 to $500,000” for the more than 200 creditors seeking money owed them by the Blairsville, Pa.-based Dlubak Corp., which filed for Chapter 11 bankruptcy last month, says Lawrence Bolla, the Pennsylvania-based attorney representing the Unsecured Creditors Committee. The sale included equipment and inventory, books and records, all intellectual property rights, all products in development and all cash, cash equivalents and accounts receivables.
At the closing, creditors will be paid from the net sale proceeds.
Grey Mountain Partners had earlier reached a tentative “stalking horse” agreement of $2 million with Dlubak Corp., only to watch GGI later eclipse that offer with a $2.2 million one of its own.
Per terms of the agreement, “stalking horse” bidder GGI will receive a $60,000 break-up fee from the proceeds of the sale, according to court records.
Neither Steven T. Shreve, the Pittsburgh-based attorney representing Dlubak Corp., nor Grey Mountain Partners managing director Jeff Vincent returned calls seeking comment.