Dlubak Corp. plant on verge of sale to steel recycling firm
BLAIRSVILLE — Although Dlubak Corp. lost its specialty glassmaking business through a bankruptcy sale last fall, it retained the 100,000-square-foot plant that housed the operation. But now that, too, is on the verge of being sold.
On Thursday, the company petitioned U.S. Bankruptcy Court for permission to sell the plant and the 11 acres it sits on. The company told the court that a buyer has been found for the property, one that has agreed to pay $800,000 for it.
The company said in court filings that the offer was the highest and best offer, actually, the only offer, it had received for the property, which sits of Route 22 in Blairsville Borough. The property had been listed for $1 million through a broker.
The court has set a hearing for Feb. 13 to entertain any competing offers and to hear objections to the sale.
Although Dlubak lost its glassmaking business and remains in bankruptcy protection, production at the plant is continuing under the new ownership of a private equity firm in Colorado.
Dlubak Corp. filed for Chapter 11 protection in August after it ran out of operating capital, a situation brought on by declining sales over the last three years. It blamed the lower sales on general economic conditions and an industry-specific decline.
The company was a defense contractor, and one of its chief products was ballistics glass for combat vehicles.
When it entered bankruptcy, it owed its primary lender, First Commonwealth Bank, at least $3.2 million.
In late September, the business’s assets, everything excluding the real estate, were sold to the private equity firm, Gray Mountain Partners, through an auction. The firm then folded the business into an affiliate, Consolidated Glass Holdings, and is continuing production at the plant under a five-year lease agreement
The monthly rent is $9,000, according to court filings. The lease contains an option for Gray Mountain to acquire the plant for $1.15 million. As part of the sale, the lease is being transferred to the buyer.
The property is being sold to businessman Clifford Wise, who owns a steel recycling operation in Braddock, Allegheny County, and a coal blending and storage facility at Conemaugh Generating Station in New Florence. He also owns Gulf Trading & Transport, a buyer and seller of coal, limestone, aggregates and scrap. Its website lists its address in Burrell Township.
Wise is acquiring the plant through another company KMS Property Acquisition Co. The sale is not contingent upon KMS obtaining financing, and it’s acquiring the property free and clear of any liens.
Dlubak said it believes it owes First Commonwealth $660,000 on the plant’s mortgage. It also said it owes around $80,000 in unpaid real estate taxes.
At the time of the bankruptcy auction, the nonprofit Indiana County Development Corp. announced it was looking at buying the property and leasing it back to the new owners as a means to preserve jobs. But any deal would have been only as a last resort, said Byron Stauffer, the development corporation’s executive director.
Stauffer said the corporation generally tries to avoid competing with the private sector, so the pending sale to a private entity all but ends any interest in a deal, he said.
News of the sale comes as the plant’s hourly workers, who are organized under Local 1537-06 of the United Steelworkers, try to come to terms with the new owner on a labor agreement.
Peggy Howard, the local’s secretary, said negotiations are proceeding and the hope is to have a tentative deal to put before the rank and file sometime later this month.
A Gray Mountain representative did not immediately respond to an email seeking comment.