Laserfiche WebLink
III IIIIIIIIIIIII III <br />999 <br />To: Mike Long, Director, Division of Minerals and Geology (via email) <br />From: Robert D. Comer <br />Date: August 21, 2001 <br />Enclosed please find the August 2001 monthly report for the Powderhorn Coal Company. <br />Please let me know should you have any questions. <br />Powderhorn Coal Company <br />August Progress Report to the Colorado Division of Minerals and Geology <br />Reoreanization <br />The Reorganization Plan and Disclosure Statement ("Plan") were filed on June 1, 2001. <br />In response, to certain objections to the Plan, including an objection from the State of Colorado, <br />Quaker has amended the Plan, largely dealing with the objections of Caterpillar and American <br />Electric Power subsidiazies ("AEP"). Additional amendments were made to the Plan in order to <br />detail a proposal made by Wexford Capital LLC to fund the Debtors' reorganization and take <br />over control of the Debtors. <br />During July 2001, several heazings were had before the Bankruptcy Court for the Eastern <br />District of Kentucky, including the initial heazing on the Debtors' Disclosure Statement. I^ <br />addition, the Company submitted updated fmancials to Mr. Clark and Ms. Linden on July 19, <br />2001 and a copy of the Five Yeaz Plan documents were submitted to Mr. Clark and the Board. <br />At the request of Quaker, the Disclosure Statement heazing previously scheduled for <br />August 10th has been rescheduled for August 24, 2001, with the consent of the creditors, <br />including the State of Colorado. This was done, in part, to seek resolution of the issues raised by <br />AEP. <br />The first amended Plan (subsequently renamed the second amended plan by order of the <br />court) was filed on July 18, 2001. Mr. Clark filed objections in excess of 100 pages (exclusive <br />of exhibits and other pleadings) to the Quaker Plans and Statements, objecting to the Debtors' <br />exclusive right to propose and solicit acceptance of the Plan and opposing the reorganization. <br />The State of Colorado has filed a claim, to which the Debtors have objected to on legal grounds. <br />Quaker believes that its Plan, as currently proposed, is not intended to affect the State of <br />Colorado's rights with respect to reclamation because the Plan and Disclosure Statement state <br />that no parties rights with respect t,: a reclamation claim will be affected by the Planl The <br />significance of this provision is that Colorado could eventually recover 100% from the <br />Reorganized Debtors if and when Colorado were to actually incur any reclamation obligations. <br />Quaker is concerned that absent the provisions of its Plan referenced in the foregoing sentence, <br />Colorado only would be entitled to recover an estimated 25 cents on the dollar (which amount <br />could be in a range of an estimated 2% to 29%) for any future reclamation costs it would incur. <br />Quaker has recently amended the Plan in a manner that it believes will satisfy certain of <br />the State of Colorado's concerns. For instance, it proposes establishment of a Class 7 for <br />purposes of fmancing the Frontier bond liabilities. While there are significant nuances as to how <br />this would be implemented, Quaker is interested in continuing the discussions so that upcoming <br />modifications of the Plan accommodate the needs of the State. For example, the Debtors <br />1 Notwithstanding the foregoing, the Reorganized Debtors will continue to wmply with their reclamation <br />obligations and all applicable laws and regulations, and nothing in this Plan shall affect any rights of any <br />governmental unit with respect to any reclamation obligation, and no such obligation shall be discharged. <br />Plan, § 8.7. <br />13883.1 <br />