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August 1991. The obligations of other corporate affiliates which <br /> were guaranteed by the Debtor brought the total obligation to $28 . 7 <br /> million. <br /> Several events have occurred which reduce the amount of <br /> Sanwa's claims from the $28 . 7 million total listed on the Debtor's <br /> bankruptcy schedules. First, Sanwa had a claim for a loan <br /> origination fee in the amount of $2 million, which Minerals reduced <br /> by $1.5 million with the proceeds of a distribution from Columbine <br /> Power Services. Second, Sanwa was paid down from real estate sales <br /> by Redstone Corporation. See Section I.C. , "Intercompany <br /> Relationships, " on page _ above. Third, Coal & Coke is paying <br /> down the Sanwa term loans by $212, 000 per month, and is paying <br /> interest on all loans on a current basis. With these adjustments, <br /> the obligations on all Sanwa loans to the Debtor and its affiliates <br /> totalled $ 26: 619i296 as of July 1E1eptember:30, 1993. <br /> Of the amount owed to Sanwa on ptembez+ :3I, <br /> $_", F31, ?_'81:(Y: 9?-8=-`281 is owed to Sanwa by Coal & -Coke *for...funds <br /> drawn by Coal­ &­­Cok& on its revolving credit line. Because the <br /> credit line is revolving, all amounts borrowed by Coal & Coke prior <br /> to the Debtor's bankruptcy have been repaid, and all amounts <br /> currently owed on the revolving line have been borrowed while the <br /> Debtor has been in bankruptcy. While the Debtor guaranteed and <br /> cross-collateralized the Coke & Coke credit line prior to its <br /> bankruptcy filing, the Debtor believes that post-petition draws on <br /> the line by Coal & Coke do not represent a claim against the <br /> Debtor's bankruptcy estate. <br /> Accordingly, the Debtor believes that while Minerals, <br /> Coal - & Coke, and Mineral's other subsidiaries owe <br /> $_- , --- , - --2:.;#�_���2�� to Sanwa as:.af :�Septe�e'r"::''3:A:��:;-:1'993, the claim <br /> against the Debt6k­ 'has been reduced to.. <br /> g as of <br /> July 1, that'::-da-t6. <br /> E. Events Preceding Bankruptcy Filing <br /> In August 1990, a fire in a coal seam resulted in closure <br /> of the Mine, which strained the Debtor's finances to the breaking <br /> point. Although the fire was put out at considerable expense and <br /> the Mine was briefly reopened, the Debtor soon ran out of cash. On <br /> January 25, 1991, due to the Debtor's lack of operating funds, Mine <br /> operations were suspended. <br /> The Debtor determined that sale of the Mine to a new <br /> operator was in the interests of all parties. Accordingly, the <br /> Debtor engaged in an intensive marketing program and maintained the <br /> Mine in an idled standby status or "mothball" status which would <br /> permit the Mine to be reopened by a new operator. Mothballing <br /> operations provided pumping and ventilation without which the Mine <br /> C:\NP51\JBH\MIDCON\DISCLO6.8TN <br /> October 6, 1993 6 <br />