Iowa City tech company Dibzees closes

IOWA CITY - State officials are taking legal action after an Iowa City tech company closed before completing state royalty payments.

Dibzees, a penny auction website that started as a class project at the University of Iowa in 2009, received a $250,000 royalty award from the Iowa Economic Development Authority in 2012.

Because investing in startups is riskier than investing in a traditional business the state required Dibzees to repay it $375,000, said Tina Hoffman, spokeswoman for IEDA.

A payment of $100,000 was due in June, she said, but the company only paid $5,000, Hoffman said.

On July 15, the company posted on its Facebook page that it would perform site maintenance and upgrades. By the end of July, the company notified the state that it would close.

'We then referred to outside counsel to take legal action,” Hoffman said.

Dibzees co-founder Casey Everts could not be reached for comment.

The Gazette Company invested in Dibzees.