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7. While the mine operated, Resources was a customer for Pitkin's limestone <br /> products. Pitkin's truck maintenance business included maintenance of the trucks used by <br /> Savage Trucking Company, which held the contract to haul coal from mine to train loadout site <br /> for Resources. The limestone finishing plant and the truck maintenance facility were leased by <br /> Pitkin from Resources. <br /> 8. In anticipation of being sold, Resources' mine was maintained in "mothball" <br /> status, ready to be reopened by the new owner. Resources needed a workforce to maintain the <br /> mine in salable condition. Pitkin provided payroll and health insurance services during the <br /> "mothball" period. <br /> 9. In addition, Resources' credit rating was such that vendors would extend credit <br /> only through Pitkin. Pitkin purchased necessary goods and services on behalf of Resources, and <br /> was then reimbursed by Resources. <br /> 10. During the "mothball" phase, the accounts receivable from Resources to Pitkin <br /> was continued as an open receivable, with monthly charges and payments applied to the <br /> outstanding balance. When Resources filed bankruptcy on February 12, 1992, the outstanding <br /> balance was for charges to cover January's Group Insurance cost. This pre-petition charge was <br /> later written off, and the write-off was entered as an adjustment to the balance. <br /> 11. In the Application for Pitkin Iron for Allowance of Administrative Claim, an <br /> account history, starting February 28, 1992, was provided which shows the adjusted balance as <br /> of that date (adjustment having been made for pre-petition write-off and subsequent payments. <br /> The Division of Minerals and Geology requested further documentation which was provided. <br /> This documentation gives the chronology of the Open Account, and shows the payments on <br /> March 31, 1992 and the write-off on July 31, 1993, with adjustment on August 1, 1993, as they <br /> were credited to the balance. <br /> 12. Resources was unable to sell the mine and decided to begin permanent closure in <br /> late July, 1992, with activities thereafter directed to reclamation and liquidation of assets. As <br /> of August, 1992, when Resources entered the reclamation phase, the outstanding balance of <br /> charges by Pitkin to Resources was zero. <br /> 13. The final closure of the mine and liquidation of Resources' assets meant that the <br /> leased properties, from which Pitkin had conducted the limestone and truck maintenance <br /> operations, would be sold. Pitkin decided to close these businesses, layoff the employees and <br /> sell the equipment used to operate them. <br /> 14. Resources needed a workforce to carry out reclamation and property liquidation <br /> activities. Equipment was also needed. Necessary goods and services had to be purchased. <br /> 2 <br />