1993-10-05_GENERAL DOCUMENTS - C1981017 (3)

Home Browse Search

concluded -that it would be necessary to begin liquidation of its assets and permanently close the Mine. See Sections II .B, "Sales of Equipment, " on page _ below, and II.C, "Sales of Real Property, " on page _ below. In January 1993, after liquidation of the Debtor's real and personal property had begun, a newly-created Utah firm, Redstone Development Company, expressed interest in purchasing the Mine. Redstone Development offered to purchase all assets of the company for $6 million, less amounts paid previously by other buyers for the Debtor's equipment and real property. Further, Redstone Development offered to assume responsibility for reclamation of the Debtor's Mine. Redstone Development's offer compared favorably with the Debtor's estimations of amount to be generated from liquidation, particularly after accounting for costs of reclamation. Liquidation of the Debtor's assets was temporarily suspended pending further negotiations. Negotiations collapsed and liquidation was resumed in March 1993 when Redstone Development failed to obtain appropriate financing to provide for a cash purchase and the posting of a reclamation bond. B. Sales of Equipment Concurrent with its efforts to sell the Mine as an operating property, the Debtor contacted several potential liquidators regarding the removal and sale of equipment in the event that it became necessary to liquidate the Mine on a piecemeal basis. Following the termination of negotiations with Geneva, the Debtor filed a motion to employ Machinery & Equipment Co. , Inc. of San Francisco, California ( "M&E" ) to remove and liquidate the Debtor's economically salvageable personal property (the "Equipment) in accordance with a contract between the Debtor and M&E (the "M&E Contract) . The motion also requested authorization to borrow money from M&E secured by a senior lien on property of the estate. The Debtor's decision to proceed with M&E was based not only on terms of compensation but on the Debtor's evaluation of which liquidator could get the best net result for the creditors. M&E has no connection to the Debtor, its affiliates, or their officers, directors, or shareholders. The motion was approved in August 1992, authorizing the Debtor to employ M&E to remove, dismantle, prepare for sale, market and sell the Equipment from the underground and surface facilities at the Mine site. The Debtor was further authorized to obtain up C:\WP51\JBB\NIDCON\DISCLOS.8TN October 6, 1993 10