Volume 48, Issue 9- September 2013
Possible Bidding War Set for Dlubak Corp. Non-Real Estate Assets
A Grey Mountain Partners may have been the initial “stalking horse” bidder for the non-real estate assets of Blairsville, Pa.-based Dlubak Corp., which filed Chapter 11 bankruptcy in August, but will now have to come up with more money if it hopes to make that dream a reality.
Grey Mountain Partners had come forth with an initial $2 million offer, but saw that bid eclipsed in August when General Glass International (GGI) began what might be a bidding war with a tender of its own offer of $2.1 million. The caveat is that GGI says its offer is contingent on an October 3 deal auction that is well past the September 21 date set earlier by the U.S. Bankruptcy Court of the Western District of Pennsylvania.
Making things more complicated is the fact that other bidders could also soon be jumping into the fray.
Any deal will require final approval by the court.
“Maybe we’ll get something back for the creditors involved,” says Lawrence Bolla, the attorney for Curbell Plastics, the Chicago-based firm owed nearly $1 million by Dlubak Corp.
All parties involved in the case were to reconvene in Pittsburgh on August 22 in the hopes of reaching an agreement. For updates, visit www.usgnn.com.
The hearings that took place on August 20 centered on the many objections raised to the bidding procedure for Dlubak Corp.’s assets. Both GGI and Oran Safety Glass (OSG) had objected to the case’s “accelerated” timeline, according to court papers filed by both companies.
Under terms of Grey Mountain’s proposed initial deal, Dlubak Corp. would sell all of its non-real estate assets to it for $2 million. The arrangement would include machinery, vehicles, computer hardware and furnishings. Also set to be included as part of an initially scheduled September 5 auction would be all equipment and inventory, books and records, all intellectual property rights, all products in development and all cash, cash equivalents and accounts receivable.
However, attorneys for both OSG and GGI filed objections strongly disagreeing with the terms of the proposed. Judge Jeffrey A. Deller heard their concerns about the expedited sale and ordered a delay of the auction until around the third week of September, according to court papers.
OSG, which is a Delaware-based subsidiary of OSG Israel, says it is a “likely” bidder of Dlubak Corp.’s assets, according to court documents filed on behalf of the company by attorney Stanley Levine. OSG balked at having the proposed auction of Dlubak Corp. assets on September 5 or September 6 because of the Jewish holiday of Rosh Hashanah and at what it called an “accelerated” process.
The terms of the deal, Levine wrote, “deprive OSG of the opportunity to effectively conduct due diligence” and unfairly favor Grey Mountain Partners.
In court documents, GGI attorney Zakarij O. Thomas likewise called the proposed deal “lopsided in favor of Grey Mountain and detrimental to the maximization of value of estate assets.”
Dlubak Corp. listed more than 200 creditors upon filing for bankruptcy, including PPG Industries, Quanex, Trulite, Intertek, Allmetal, Bayer, Bottero Inc., Bystronic, C.R. Laurence Co. and Glaston America Inc., among others. Curbell Plastics is by far the largest creditor, with Dlubak Corp. owing it more than $905,000 according to court records. The company’s estimated assets and estimated debts are both listed between $1 million and $10 million, according to court records.