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<br />Date: August 25, 1994 <br />To: Susan McCannon <br />From: David Berry <br />Re: Twin Pines <br />We have a developing problem and I would like your opinion as soon <br />as possible. Here's the deal: <br />-Twin Pines reps. have indicated to us at various times over the <br />past few months, that they are having trouble continuing <br />maintenance of the site. <br />-They have stated that a complete bail is a possibility. <br />-We currently hold a total bond amount of $55,114, in the form of <br />two CD's (#3705-$984;#58189-$54,130). This amount is probably less <br />than we need to adequately reclaim the site. <br />-The A.G. has advised me that if the company declares bankruptcy, <br />the CD's may be frozen, but they are not sure how this would play <br />out. <br />-I am fearful that any NOV or other hardball tactics would result <br />in the operator walking, which would probably also result in a <br />bankruptcy declaration. <br />-The operator has yet to submit a renewal application, which was <br />due 6/17/94 (Permit Exp.-12/17/94) <br />-We probably cannot forfeit, without an expired permit or other <br />formally documented noncompliance. Initiation of such proceedings <br />would likely trigger a bankruptcy filing. <br />Question #1 - <br />The operator has allowed the liability insurance to lapse, and the <br />policy appears to remain ineffective. The policy expired 5/26/94, <br />and the operator is apparently trying to establish coverage now. <br />Regardless, the insurance company will not issue a new policy <br />retroactive to 5/26/94, and draft documents received in the last <br />few days do not verify adequate coverage. Insurance policies have <br />received detailed scrutiny by OSM. Do we proceed with an NOV? <br />Question #2 - <br />During January of this year, the operator submitted a technical <br />revision, at our request, to further clarify a somewhat vague <br />