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`VE STOP & STR AVV_N' <br /> James B. Holden, Esq. <br /> October 15, 1992 <br /> Page 2 <br /> primary bases for Sanwa's willingness to discuss a concept <br /> under which Sanwa would, in effect, "trade down" a portion <br /> of the proceeds of sale of its collateral to the unsecured <br /> creditors was Sanwa's desire to obtain Committee support for <br /> the expeditious approval and consummation of the proposed <br /> Crystal Springs transaction. Now that that transaction is <br /> moribund, at least that motivation or basis no longer <br /> exists; and <br /> (3) Sanwa's willingness or unwillingness to trade <br /> down a portion of its collateral to the unsecured creditors <br /> falls squarely within the broad category of "settlement <br /> negotiations" and should not be brought to the attention of <br /> the Bankruptcy Court. In our judgement, the unsecured <br /> creditors have no factual basis or legal theory upon which <br /> they can legitimately make a claim to any portion of Sanwa's <br /> collateral. In meeting with Mr. Seifert to discuss a <br /> settlement, Sanwa's sole motivation was to expedite and <br /> facilitate the consummation of the contemplated Crystal <br /> Springs transaction and to avoid the costs associated with <br /> the defense of any litigation which might be initiated by <br /> the Committee or any members of its constituency. To bring <br /> the specific settlement concept which was discussed at the <br /> June 16 meeting to the attention of the Bankruptcy Court <br /> could foster the absolutely incorrect impression that the <br /> Committee has some legitimate theory or basis for the <br /> assertion of a claim against the collateral or Sanwa to <br /> which Sanwa attaches some merit or validity. <br /> I know that you will understand the concerns which I <br /> have described and hope that you will be sensitive to these <br /> concerns in the future. <br /> Finally, Sanwa would be willing to meet with the <br /> various parties in interest to discuss the concept of an agreed <br /> settlement involving possible concessions to the unsecured <br /> creditors and/or the Colorado Mined Land Reclamation Board, but <br /> only if such parties are prepared to approach such discussions in <br /> a serious, realistic and constructive way. Sanwa stands ready to <br /> consider any reasonable proposal for the efficient, expeditious, <br /> and dollar-maximizing resolution of this matter. <br /> Ve� truly o rs, <br /> N al L. Wolf <br /> NLW:dw <br /> cc: Andrew Heinz <br /> Stuart R. Schwartz, Esq. <br /> Cheryl R. Tama, Esq. <br /> Stephen W. Seifert, Esq. <br /> Frank R. Johnson, Esq. <br />