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September 22, 1992 <br /> Page 2 <br /> describing the benefit to the unsecured creditors of the <br /> continued use of Chapter 11. My status report, filed on <br /> September 14, stated that <br /> The basic strategy is unchanged since the prior status <br /> report in June. The value of the Debtor's estate is <br /> Iasi than the amount owed to Sanwa, but the Debtor <br /> intends to facilitate negotiations between the Debtor's <br /> secured and unsecured creditors over the distribution <br /> of the proceeds of the Debtor's assets, and to persuade <br /> Sanwa to "trade down" some value to junior creditors in <br /> order to justify bankruptcy administration. <br /> Judge Clark apparently is becoming impatient with this <br /> case. Several days ago I hkd a telephonic hearing with Judge <br /> Clark on my first fee application in the case. Judge Clark set <br /> the application for hearing even though no objection had been <br /> made by any interested party. Her main concern was whether my <br /> services have produced any benefit "to the creditors" (meaning <br /> the unsecured creditors) . I mentioned that I have been seeking <br /> an agreement with Sanwa to trade value to unsecured creditors, <br /> but Judge Clark immediately interrupted and said, "But you don't <br /> have an agreement yet, do you. " <br /> I am left with the distinct impression that unless we <br /> reach a firm agreement, in the near future, to allocate some <br /> liquidation proceeds to unsecured creditors, the Court will <br /> entertain a motion to dismiss the case. <br /> Creditors would be well advised to stay out of the <br /> chain of title while we are taking care of reclamation <br /> obligations. The solution is a Chapter 11 liquidating plan. Now <br /> that the liquidation program is-well under way, the main tasks <br /> remaining before the filing of a plan are working out the details <br /> regarding the disposition of the proceeds of liquidation, and the <br /> scope of the reclamation program.' . This letter provides some <br /> thoughts;on the terms of the plan. <br /> Mine reclamation <br /> The cost of reclamation has been estimated at $3 <br /> million by the Division. Resources believes that the job can be <br /> done for $1.5 to 2 million, by* using Resources' earth-moving <br /> equipment and by having certain tasks performed by M&E under the <br /> equipment salvage contract which has been approved by the Court. <br /> Under that contract, M&E is required to remove all metallic <br /> structures located at the mine site, and to remove all metallic <br /> and non-metallic scrap, excluding hazardous materials such as <br /> asbestos or PCB'*. More generally, ME is required to use <br /> e•d doss3r 18 N3a1oH wdee:ee 26, 22 d3s <br />