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HICKORY COAL CORPORATION Mr. James H. Moncrief Director, Tulsa Field Office August 31, 1987 Office of Surface Mining Page 3 of 3 - On July 17, 1987, a temporary order was entered, restraining La Plata from violating the cessation orders and setting a "show cause" hearing for the afternoon of July 23, 1987. (See Exhibit J attached) - On July 23, 1987, La Plata filed a petition in bankruptcy, causing the legal proceedings in Durango to be automatically stayed and dissolving the restraining orders that had been issued. (See Exhibits K and L attached) - The Investors have filed a Motion in the bankruptcy proceeding for relief from the stay to allow the Durango legal proceedings to continue. That motion is now pending, awaiting a hearing date. Based on the foregoing and the attached exhibits, I would respond to your letter to Mr. Podpechan as follows: First, contrary to the allegation in your letter and the recitation in the application submitted by La Plata to MLRD, Mr. Podpechan does not now and has never had any ownership or control interest in La Plata Coal Corpor- ation. Mr. Podpechan is not now and has never been, directly or indirectly, a shareholder, director or officer of that corporation. (See Exhibits A and K attached) Second, even if an ownership or control connection to La Plata existed, OSM does not have the authority to take the action threatened with regard to Hickory Coa! Corporation. Such authority will not exist, if it ever does, until OSM completes its current rule-making with regard to Section 773 of the regulations defining "ownership" and "control". In fact, OSM has' specifically acknowledged that, in fact situations like that alleged in your letter, it does not currently have authority to act. (See Federal Register, Vol. 50, Page 13726) In addition, under the most recently proposed definition of "owner- ship" and "control" by OSM, the facts of the instant case would not justify blocking the Hickory permit. (see Federal Register, Vol. 52, Page 16275-78) Thirdly, and most importantly, the facts outlined above clearly show that Mr. Podpechan, and the other investors, have diligently attempted to wrest control of the mining operations away from La Plata in order to protect their investment and to comply with all regulatory requirements. In fact, the inves- tors have spent and are resigned to continuing to spend, thousands of dollars on court costs and attorney's fees to make this effort. The efforts by Mr. Podpechan and the other investors to date have been thwarted by the bank- ruptcy filing by La Plata. Until the investors can get La Plata legally out of possession of the mining property, the investors are legally restrained them- selves from effectuating abatement of the enforcement actions. In essense, Mr. Podpechan is already diligently attempting to exactly what you want. V ry tr y~,~urs;~ ussell E. Wienecke :cf Attachments