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UNITED STATES BANKRUPTCY COURT <br /> FOR THE DISTRICT OF COLORADO <br /> In Re: ) Bankruptcy No. 92 11658 PAC <br /> (Chapter 11) <br /> MID-CONTINENT RESOURCES, INC. ) Motion Control No. P 1 <br /> T.I.N. 36-1475193 ) <br /> Debtor. ) <br /> DIRECT TESTIMONY OF LOUIS M. LAGIGLIA <br /> 1. My name is Louis M. LaGiglia. I am vice president and treasurer of Mid- <br /> Continent Resources ("Resources"), and serve as court appointed trustee. <br /> 2. Resources operated a complex of underground coal mines, but discontinued coal <br /> mining on January 25, 1991, due to the loss of workers' compensation coverage. <br /> 3. Resources then decided to sell the mine. In order to maintain it in salable <br /> condition, it was necessary to keep a limited work force and to make certain purchases of <br /> essential goods and services. <br /> 4. The law requires an employer to provide workers' compensation coverage for <br /> employees in the workplace. Resources could not obtain workers' compensation coverage. For <br /> that reason, and in order to keep a work force at the mine site while complying with the <br /> requirements of the law, it was necessary to contract for payroll services by companies which <br /> could provide the required coverage. Pitkin Iron Corporation ("Pitkin") was one of those <br /> companies, starting in January 1992. <br /> 5. In addition, the economic problems of the mine were such that credit for goods <br /> and services was not extended to Resources. Pitkin did have credit and in some cases made <br /> essential purchases on behalf of Resources. <br />