MOR analysis: Dicon inventory liquidation
The Dicon MOR show $31K in post-petition Accounts Recievable billing.
Unpaid at this time are 29K in payroll taxes, 19K in secured financing (ie forklift loans, etc), and 30K in 30 day accounts payable post-petition.
The bank balance (35K) and the AR will not sustain the current billing at Dicon. Arrears on payroll taxes are a clear indicator that Chapter 7 liquidation is inevitable.
Dicon's disposable asset is its inventory. This evidently is stored off-site at the Oneida LTD warehouse. Dicon has valued its inventory at "cost-of-production" to get a $840,000 figure.
This stale inventory is the "pallet loads" of returned product that message board folks had wind of. Note that the MOR credits "returned allowances" as an asset, as it takes returned inventory back it credits cost-of-production value to its balance.
I expect the inventory will be liquidated at pennies on the dollar. Figure $75,000, which will be just enough to wind down Dicon and pay the BK trustee to close up shop.
The other assets (building and machinery) have pre-petition liabilities equal to the value. There may be some recovery when the machinery is sold, but the security ownership of the machinery and building is not precisely clear in the MOR. The county has a secured financing past-due, so their land lease or building loan is secured and subject to priority recovery.
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