1993-10-15_GENERAL DOCUMENTS - C1981017

• Permit No: C1981017
• IBM Index Class Name: GENERAL DOCUMENTS
• Doc Date: 10/15/1993
• Doc Name: 3rd motion for authorization to use cash collateral
• From: US District Court
• To: Mid-Continent Resources, Inc.
• Permit Index Doc Type: General Correspondence
• Media Type: D
• Archive: No

FROM:natural TO:DMG OCT 15, 1993 8:23AM #085 P.11
48. Other claims which are to paid pursuant to the
Third Motion essentially anticipate the completion of Chapter 11
proceedings. The $52,000 of general and administrative expenses,
the $245,000 of other operating expenses, and the approximate
$120,000 of legal fees, all are administrative expense claims
which will have to be paid as a condition to Plan confirmation.
49. Under the pending Plan, the source of payment of
such claims is the liquidation proceeds from sale of secured
property. Payments pursuant to this Motion eliminate payments
which otherwise would have to be paid on the effective date of
the Plan. This Motion therefore has no impact on the
distributions which are proposed under the Plan.
Existing Lienholder®
50. Under the previous and pending Orders approving
sale of Resources' real property and equipment, the liens of
creditors on such real property and equipment are transferred to
the proceeds of sale -- the cash collateral under this Third
Motion. The following creditors thus have, or may have, an
interest in the cash collateral which Resources proposes to
spend:
a. The State of Colorado and its political
subdivisions, Pitkin County, Garfield County, and
Gunnison County, hold statutory tax liens, by operation
of C.R.S. 539-1-107, on all taxable real and personal
property of Resources, to secure the payment of real
and personal property taxes. As specific assets, such
as the Fabrication Shop or individual pieces of
equipment, are sold, outstanding property taxes on
those specific assets are cleared at the time of
closing. Resources thus believes that the State does
not have an interest, arising from property taxes, in
the cash collateral which remains after sale (which is
the subject of this Motion) . Alternatively, as noted
in Paragraph 2, the estate retains ample value to pay
all such taxes.
b. Sanwa Business Credit Corporation ( "Sanwa" ) holds
consensual liens on all real and personal property of
Resources, specifically including the assets which are
the source of cash collateral in this Third Motion.
These consensual liens have priority over all other
liens, except statutory liens for taxes, the DMG's lien
on the Rockdust Plant, and a few purchase money
security interests on equipment. Sanwa's liens secure
claims against Resources in the approximate amount of
$15, 000,000. Resources acknowledges that the funds
which Resources proposes to spend are, in fact, cash
collateral of Sanwa and that there are no funds
available to Resources that are not Sanwa's cash
collateral. Sanwa is being served with a copy of this
Third Motion and the accompanying notice, and in the
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