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T <br /> BURNS, FIGA & WILL, P.C. <br /> Cheryl Linden <br /> June 9, 1995 <br /> Page 4 <br /> "Intercompany Relationships" on page 2 above. Such claims are treated as <br /> administrative claims under the Plan and are paid in full, subject to allowance by <br /> the Court. Pitkin Iron's claim for unpaid services was $205,775 on December <br /> 31, 1993. <br /> C. Intercompany Relationships <br /> . . . Pitkin Iron has provided support services for the Debtor . . . because the <br /> Debtor is unable to obtain workers' compensation coverage, Pitkin Iron provides <br /> payroll services for personnel under the Debtor's direction, and leases certain <br /> pieces of equipment to the Debtor to assist in the Debtor's Mine reclamation <br /> program. <br /> Your next concern regards the contract between Pitkin Iron and MCR. You raise a <br /> concern that the contract was not approved by the Bankruptcy Court. However, such approval <br /> was not necessary. The Bankruptcy Code requires approval for use of cash collateral, which <br /> was done. The Bankruptcy Code contains no such requirement for approval of a contract such <br /> as the one between Pitkin Iron and MCR. The existence of that contract and the fact that it was <br /> not approved by the Bankruptcy Court, when it did not need to be, does not form the basis of <br /> legitimate objection on behalf of the State of Colorado. Pitkin Iron did not take a risk that the <br /> cash collateral authorizations would not cover the costs incurred by it, but, in fact, as set forth <br /> above, the Plan contemplated the filing of an application for administrative claim by Pitkin Iron <br /> and was clearly disclosed to all the creditors. <br /> Your next concern was for the payment of an administrative charge for which you feel <br /> there should have been court authorization, pursuant to 11 U.S.C. § 327. That Section of the <br /> Code refers to professional expenses such as attorneys and appraisers. The administrative charge <br /> was, generally, for bookkeeping and other clerical expenses, which do not fall under Section <br /> 327. If you have any authority which requires the approval under Section 327 of bookkeeping <br /> and clerical expenses, I would like to see it. <br /> Enumerated Questions: <br /> 1. Which pieces of equipment are owned by Pitkin Iron, which pieces are actually used for <br /> MCR's purposes or were used also by Pitkin Iron, and which costs attach to that <br /> equipment. The application requests the estate to pay for numerous repairs,fuel, labor, <br /> and parts, etc, on equipment plus insurance. <br /> Please provide a clear breakdown of the equipment owned by Pitkin, the equipment <br /> actually used for MCR's purposes, and the costs allocated thereto. <br />