GENERAL30842

• Permit No: C1981041
• IBM Index Class Name: General Documents
• Doc Date: 9/19/2001
• Doc Name: September Progress Report
• From: SNELL & WILMER
• To: DMG
• Permit Index Doc Type: GENERAL CORRESPONDENCE
• Media Type: D
• Archive: No

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Snell &Wilmer
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1200 Seventeenth Street, Suite 1950
Tabor Cen[er
Denver, Colorado 80202
[phone]
Fax: [phone]
Robert D. Comer [phone]
In[emee rcomeAswlaw.com
OFFICE MEMORANDUM
TO: Mike Long, Director, Division ofAlinerals and Geology (via email)
FROM: Robert D. Comer
DATE: September 19, 2001
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Enclosed please find the September 2001 monthly report for the Powderhorn Coal
Company. Please let me know should you have any questions.
Powderhorn Coal Company
September Progress Report to the Colorado Division of Minerals and Geology
Reore_anization
For reasons that are unclear to Quaker and Powderhorn, counsel to the Mined Land
Reclamation Board continues to oppose the Quaker plan of reorganization, despite accommodations
made to the State and the fact that the State of Colorado will not be adversely effected by Quaker's
proposed plan of reorganization. In fact, documents prepared by bankruptcy counsel to the Boazd
boast that it had a hand in the Bankruptcy Court's decision to consider two opposing plans.
The Court recently has allowed consideration of opposing plans by Wexford Capital LLC
and American Electric Power ("AEP"). The AEP plan characterizes the Powderhorn property as a
"swing asset," meaning that future treatment of the property would be decided at a later date and
that in all probability, AEP will not be responsible for reclamation at the Powderhorn facility in the
future. The Wexford Plan remains unclear as to its treatment of reclamation liabilities in Colorado.
Despite the lack of commitment in these plans, [he Board has indicated that it does not oppose the
AEP plan, provided the Colorado property is included in the assets purchased by AEP. It seems odd
that the Board would oppose the Quaker plan and support the AEP plan given the positive working
relationship that has developed between the Board, the Division and Powderhorn over the past nine
months. At every hearing before the Board, Powderhorn has offered to work with the State in
revising the Plan and the Statement to reflect reasonable interests of the State (see ems,, August 21,
200] Monthly Report to the Board). Powderhorn has fulfilled each and every commitment it has
made under its Reclamation Plan and to this Board, including the acceleration of certain reclamation
activities. Powderhorn also acted swiftly to resolve the water management plan concerns identified
by the Division.
On Friday, September 14, 2001, the official committee of unsecured creditors voted to
recommend acceptance of the Quaker plan to all unsecured creditors (the secured creditors are
contractually issued to accept the plan) (see attached). Now, pending mitigation of the AEP
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