Court Enters Order Granting Motion for Sale of Property

On or about February 14, 2014, following a public sale hearing, the Court entered an Order granting the Debtor’s Motion for sale of its former operating facility to KMS Property Acquisition Co. for the sum of $800,000.  After payment of real estate taxes, broker’s fees, US Trustee’s fees, and related closing costs, the entire remainder of the sale proceeds are likely to be paid to the Debtor’s primary secured lender, First Commonwealth Bank.  As a result, there presently appear to be no funds available from this sale for the benefit of the Bankruptcy Estate.  Closing is set to occur on or before March 31, 2014, with a report of sale to be filed shortly after closing.

Committee Files Liquidating Plan and Motion for Authority to Prosecute Avoidance Action

On or about February 10, 2014, following an Order from the Court directing any party in interest to file a Plan and Disclosure Statement, the Official Committee of Unsecured Creditors of Dlubak Corp. (the “Committee”) filed a liquidating Chapter 11 plan (the “Plan”).  The crux of the Plan revolves around the disbursement of any sale proceeds available to the Estate from the disposition of substantially all of the Debtor’s assets, as well as the pursuit of potential preference, fraudulent transfer, and related claims against third-parties.  A hearing has been scheduled on the Disclosure Statement for March 27, 2014, at 10:00am in the Johnstown Bankruptcy Court, or via video conference from Pittsburgh, with objections due by March 20, 2014. 

In conjunction therewith, the Committee also filed a Motion for Authority to Prosecute Avoidance Action (the “Motion”) against the Debtor with respect to potential fraudulent and/or unauthorized post-petition transfers made by the Debtor to Dlubak Glass Co. and Frank C. Dlubak.  The Committee demanded that the Debtor pursue said action valued at approximately $83,000 or otherwise that it be granted derivate standing to do so.  A hearing has been scheduled on the Motion for March 13, 2014, at 10:00am in the Johnstown Bankruptcy Court, or via video conference from Pittsburgh, with responses due by March 6, 2014.

Court Enters Order Directing Any Party to File a Plan

On or about January 14, 2014, the Court entered an Order finding that the 120-day exclusivity period for the Debtor to file a Plan of Reorganization and Disclosure Statement concluded on December 5, 2013.  As a result, the Court ordered that the Debtor or any party in interest shall file a Plan and Disclosure Statement on or before February 13, 2014.  The Court further ordered that the failure to file a Plan and Disclosure Statement within the time allotted without extension will result in a Rule to Show Cause Hearing to determine why the Bankruptcy Case should not be converted to Chapter 7 and/or dismissed.  A hearing has been scheduled for February 27, 2014, at 10:00am in the Johnstown Bankruptcy Court, or via video conference from Pittsburgh.  In the event that a Plan and Disclosure Statement are timely filed, the Rule to Show Cause Hearing will be cancelled.