1993-08-06_GENERAL DOCUMENTS - C1981017 (2)

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WINSTON & STRAWN Janes S. Holden, Esq. Auquat 6, 1993 Page 2 (3) Paragraphs 3.4 and 4.4 provide for payment to Class 7 and Class 8 (administrative convenience classes) from cash on hand on the Effective Date. These are general unsecured claims. Payments to the members of those Classes should come from the 234 share of the creditors' Trust that is allocated to all general unsecured creditors in this case. We understand the necessity and usefulness of the administrative convenience classes; however, those Classes should not receive a distribution which is over and above the 23% allocated for general unsecured creditors. (4) Paragraph 5.2 provides that S 507(a) (7) Tax Priority Claims (sales and use taxes) shall be paid in full on the Effective Date. You have estimated that the amount of such claims is approximately $360,000. Under Bankruptcy Code S 1129(a) (9) (C) , the holder of such claims may receive deferred cash payments equal to the value of the claims over a period not greater than six years. In order to assure that the Debtor has sufficient cash on the Effective Date, we recommend that these be paid in accordance with S 1129(a) (9) (C) . (5) It is our understanding that the HIM, OSK, DMG, and any other appropriate governmental agencies have agreed to limit their respective claims to the amounts in the Reclamation Account and Environmental Trust. While paragraph 6.2.10 limits the obligations of the Trustee and Creditors' Trust for reclamation and environmental remediation, that language does not seem to be broad enough to "cap" the amount of those claims. We believe the Plan should clearly state that those claims have been consensually "capped" and that the Reclamation Account and Environmental Trust are the sole source of funds for satisfaction Of such claims. Also, we have been informed that the MLRS wishes to receive the entire proceeds of sale of the Rock Dust Plant in addition to the $1.5 million to be transferred to the Reclamation Account. This is simply unacceptable. The proceeds of sale of the Rock Dust Plant must be included within the $1.5 million. (6) Sanwa has in the past agreed to the use of cash collateral for various post-petition administrative expenses. These include the $15,000 retainer for counsel to the creditors' committee and ongoing reclamation and environmental remediation costs. Amounts already approved or paid for reclamation or environmental remediation should be deducted from the total to be distributed by the Creditors' Trust to the Reclamation Account and Environmental Trust. E00 ' 39Hd 62 : 9T EE , 9 EmH