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DMG Li`_ioation <br />5. On September 17, 1993, the DMG filed Civil Action <br />No. 93 CV 209 in the District Court, Pitkin County, Colorado, <br />against the Debtor's corporate parent, Mid - Continent Minerals <br />Corporation, two officers and directors of the Debtor, John A. <br />Reeves and Robert Delaney, and an employee of the Debtor, Diane <br />Delaney (the "DMG Litigation "). <br />6. The DMG Litigation seeks injunctive relief <br />requiring the defendants to "immediately" reclaim the Debtor's <br />mine site, or, in the alternative, for a money judgment for the <br />cost of reclamation. <br />7. The Debtor believes that it has interests in the <br />DMG Litigation which require the advice of counsel and possible <br />representation in the DMG Litigation. Although the Debtor is not <br />a named defendant, the injunctive relief which is sought attempts <br />to exercise control over the Debtor's mine site. Moreover, the <br />subject matter of the DMG Litigation is intimately related to the <br />Debtor's pending Plan of Liquidation. <br />8. In objecting to a previous application to employ <br />other counsel, which Resources withdrew in order to avoid an <br />appearance of impropriety, the DMG objected to the employment of <br />any special counsel to the extent that Resources was seeking to <br />intervene in the DMG Litigation. However, the DMG simultaneously <br />admitted that the Debtor has an interest in the litigation, by <br />arguing that the defendants "should be impleading the debtor as a <br />third party defendant since the debtor was the mining permittee <br />and is also liable under Colorado law for reclamation." <br />9. The Debtor submits that the DMG should not attempt <br />to gain advantage in litigation which it initiated, by attempting <br />to prevent the Debtor from even employing counsel to represent <br />the Debtor's interest. <br />10. Whether or not the Debtor seeks to intervene in <br />the DMG Litigation, the Debtor needs the advice of counsel who is <br />competant in reclamation matters. <br />The Debtor's Bankruptcy Case <br />11. The DMG's prior objection to the employment of <br />special counsel recognized the interrelationship of its <br />litigation with the Debtor's bankruptcy case, when it was stated <br />that "The Division's claim in bankruptcy is based on the debtor's <br />reclamation obligation. However, the debtor's proposed amended <br />liquidation plan does not cover all of the expenses required for <br />complete reclamation." <br />-2- <br />