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OSG and GGI Eying Dlubak Corp. Assets

Post Time:Aug 19,2013Classify:Industry NewsView:147

Two additional companies that have also shown interest in possibly purchasing Dlubak Corp.’s non-real estate assets were granted their wish on Friday when the proposed auction was delayed for a few weeks. Dlubak Corp. filed for Chapter 11 bankruptcy protection on August 7.

Dlubak Corp., a Blairsville, Pa.-based supplier of security glass and architectural flat and bent glass laminates, had reached a “stalking horse” agreement with Grey Mountain Partners Fund II LP that would help the company keep its doors open. Under the terms of the proposed deal, Dlubak Corp. would sell all of its non-real estate assets to Grey Mountain Partners for $2 million. The arrangement, which would first require court approval, would include Dlubak Corp. machinery, vehicles, computer hardware and furnishings and first require court approval. Also set to be included as part of an initially scheduled September 5 auction as assets 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.

Attorneys from both OSG and GGI filed objections with Judge Jeffrey A Deller, strongly disagreeing with the terms of the

The goal will be to come up with a solution “that is not everybody’s favorite, but something everybody can live with,” says Steven T. Shreve, the Pennsylvania-based attorney for Dlubak Corp.

OSG, which is a Delaware-based subsidiary of OSG Israel, says it is a “likely” bidder for 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.

Efforts to reach Levine were unsuccessful on Monday morning.

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.” Thomas noted that GGI has a “strong interest” in the bidding on Dlubak Corp.’s assets, but contended that the proposed September 3 bidding deadline and proposed auction two days later on September 5 were slanted in favor of Grey Mountain. Thomas called the bid protections offered to Grey Mountain “severely chilling” to the ability of other parties to bid on Dlubak Corp.’s assets.

Thomas declined further comment when reached Monday morning.

Dlubak Corp listed more than 200 creditors upon filing for

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 company’s cash flow 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.

Stay tuned to USGNN? for updates as they are made available.

Source: http://www.usglassmag.com/2013/08/not-so-fast-grey-mountain-osg-and-ggi-eying-dlubak-corp-assets/Author: