1993-10-05_GENERAL DOCUMENTS - C1981017 (2)

Home Browse Search

October 1, 1993 Page 3 became concerned that having title in trust would be perceived as unusual by prospective purchasers and title companies, possibly chilling sales. Under the Plan as amended, title continues to nominally reside in the' Debtor. Irrevocable powers of attorney are granted so that the Creditors' Trustee can pass title without the involvement of the Debtor. By keeping title in the Debtor, there also is firmer ground for passing title free and clear of liens using bankruptcy powers. There have been some revisions to the cash payments required on the Effective Date, particularly concerning priority tax claims. This reflects the fact that sales of equipment have been slow and the Debtor will not have sufficient cash on the Effective Date to make all the payments it had hoped to make. Several changes have been made pertaining to releases, which are now contained in a new Article VII. Section 7 .4 makes it clear that, except as provided in Sections 7 .2 and 7 .3, the Plan does not limit the liability, if any, of third persons with regard to mine reclamation and environmental remediation. This is consistent with the earlier plan but has now been made express. Section 7 .2 is new, and provides for a release of Sanwa from the claims of all parties. We felt that if Sanwa is being asked to "trade down" liquidation proceeds that are subject to its liens, it should be provided with assurance that it will not be exposed to litigation. Section 7.3 (derived from Section 7. 1 in the former plan) has deleted the requirement that two-thirds of the Class 9 general creditors accept the Plan. Instead, Section 7.3 now requires acceptance by a minimum of $10 million of Class 9 claims. There are about $15 million of Class 9 claims. The exact amount of the class will be impossible to determine during the voting period because of the possibility that claims objections may be filed after confirmation. Moving to a fixed dollar requirement is intended to remain true to the spirit of past discussions, while eliminating the difficulty of determining just when the two-thirds requirement has been satisfied. We are unlikely to reach $10 million of acceptances without the acceptance of the Colorado Compensation Insurance Authority (about $6.9 million) , Public Service (about $1.7 million) , and the Denver Rio Grande (about $1 million) , so I made the acceptance by those creditors an express term of the Plan. If those three creditors accept the Plan, it will not be difficult to satisfy the $10 million requirement.