Debtor Files Motion to Sell Real Estate; Public Sale Hearing Scheduled

On or about January 9, 2014, the Debtor filed a Motion to Sell Real Estate Free & Clear of Liens & Encumbrances (the “Motion”) with respect to the sale of its former operating facility located at 520 Chestnut Street, Blairsville, PA 15717.  The Debtor previously sold substantially all of its non-real estate assets to Dlubak Specialty Glass Corporation, an affiliate of Grey Mountain Partners (the “Buyer”).   As a result, the Debtor has essentially ceased doing business, while its former operating facility is being leased by the Buyer.  The Debtor now proposes to sell substantially all of its real estate assets to KMS Property Acquisition Co. (“KMS”) for the sum of $800,000.  With approximately $660,000 still reportedly owed to First Commonwealth Bank, and additional costs expected to total in excess of $75,000, including real estate taxes and a broker’s fee, there presently appears to be limited funds available from the sale for the benefit of the Bankruptcy Estate. 

The proposed sale to KMS is subject to higher bidding by qualified third-party buyers.  A Sale Hearing has been scheduled for Thursday, February 13, 2014, at 10am in the Johnstown Courtroom, or via video conference from Pittsburgh.  Responses to the Motion are due by February 6, 2014.  For additional information regarding the terms of the proposed sale or third-party buyer qualifications, please do not hesitate to contact us at dlubakcommittee@quinnfirm.com.

Debtor Files Application to Employ Broker; United Steelworkers File Priority Claim

On or about December 27, 2013, the Debtor filed an application to employ a real estate broker (the “Application”) with respect to the sale of the Debtor’s manufacturing facility.  The Debtor previously sold substantially all of its non-real estate assets to Grey Mountain and has essentially ceased doing business.  In conjunction therewith the Debtor had been attempting to procure a buyer with respect to its remaining real estate holdings, which Grey Mountain currently leases.  The Debtor now seeks to have Laurence Neish of Whyte/Stone Realty LLC appointed as broker because no purchase offers have been forthcoming.  A hearing on the Application has been scheduled for January 23, 2014, at 10am in the Johnstown Courtroom, with responses due by January 16, 2014.

Additionally, the United Steelworkers (the “USW”) filed an unsecured priority claim in excess of $224,000 (the “Claim”) based on certain pre-petition wages/benefits that have purportedly not been paid to union employees.  As alleged in the documents attached to the Claim, the Debtor has purportedly not honored certain pre-petition obligations per the terms of a collective bargaining agreement with the USW.  The Claim currently represents an unsecured priority claim that would get paid ahead of general unsecured claims.  The Claim is generally subject to further amendment and/or objection.