BLAIRSVILLE — A fabricator interested in acquiring Dlubak Corp.’s glassmaking business out of bankruptcy has upped the ante, proposing to buy its assets for $200,000 more than a previous offer.
The $2.2 million bid from New Jersey-based General Glass International bests an offer from a private equity firm that also is looking at acquiring the business. With the offer, GGI also is replacing the private equity firm as the stalking-horse bidder in an auction set for Sept. 23.
GGI is a fabricator and distributor of architectural and decorative glass.
Dlubak filed for Chapter 11 bankruptcy earlier this month on three straight years of declining sales. Much of Dlubak’s business was derived from government contracts as a supplier of ballistics-grade glass products used in combat vehicles.
The company is listing assets of about $5.1 million and liabilities of roughly $7.3 million.
In filings before the U.S. Bankruptcy Court’s Western District of Pennsylvania, Dlubak said it began looking for a strategic buyer when it became apparent that the only way to save the business was to sell it. The company said it undertook an extensive marketing effort, through which it connected with the private equity firm Grey Mountain Partners. Grey Mountain had agreed to acquire the business for $2 million and serve as the stalking-horse bidder for the auction.
However, the branch of the Department of Justice that monitors bankruptcies; two potential bidders, including GGI; Dlubak’s primary secured lender, First Commonwealth Bank; and its largest unsecured creditor objected to the agreement. They argued that it established auction rules favoring Grey Mountain. They also said the agreement provided for an extraordinarily high breakup fee that would be due to Grey Mountain if it was unsuccessful at the auction.
But under the new agreement with GGI, the rules have been changed to reflect the objections. The agreement also pushes back the auction date to Sept. 23. It originally was scheduled for next week.
On another front, First Commonwealth Bank has asked the court to set aside rules preventing it from pursuing foreclosure on the plant property.
The plant, which is more than 100,000 square feet, sits off Route 22 and is not part of the sales agreement with GGI.
The bank has told the court that the $2.2 million offer won’t be enough for the company to settle its debt with the bank. The bank said it is owed at least $3.2 million on past borrowings, plus $300,000 on additional credit it extended to keep the business operating through bankruptcy.