1993-05-17_GENERAL DOCUMENTS - C1981017 (2)

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Plan Outline May 17 , 1993 Page 4 Total unpaid professional fees to be paid from the estate, other than from retainers, therefore are estimated at $204 , 413 as of Plan confirmation. The actual amount of allowed fees will be subject to Court approval, which probably will not occur until after Plan confirmation. In addition, Mid-Continent Minerals is owed $274 ,200 for post-petition advances to Resources . This claim will receive nothing under the Plan. Class One: Property taxes. These taxes have senior lien status under Colorado law. The total amount owed is $870, 656 as of the end of May 31, 1993 . About 53% of the total is owed to Pitkin County and about 47% is owed to Gunnison County. With interest on past-due taxes for 1990, 1991, and 1992, and accruals for 1993 taxes, the amount owed as of September 1, 1993 is estimated to be $922 , 358 . The Plan should leave the claims unimpaired, meaning that the claims would not necessarily be paid under the Plan. The property would be transferred into the Creditors ' Trust subject to the tax lien, and the counties would retain all of their legal rights with respect to such claims (under Colorado law, the claim for property taxes is non-recourse to the owner of the property) . This may set the stage for an agreement with the counties which could be incorporated into the Plan. The property has gone to tax sale for 1989, 1990, and 1991 taxes. At the tax sales, there were no purchasers for the property, reflecting the fact that tax sale purchasers do not wish to purchase property which is subject to environmental problems. Lacking a purchaser, the property was "stricken off" to the counties, meaning that the counties hold the certificates of purchase. The counties realized nothing from property which has been stricken off. The counties have an interest in seeing that the reclamation of the mine site is carried out. This could give rise to an agreement with the counties in which the Creditors ' Trust would purchase the tax certificates at a discount. The tax savings thus realized would be transferred from the Creditors ' Trust to the Reclamation Trust. The tax revenues lost by the counties thus would be used for environmental cleanup, to the benefit of county residents. Moreover, the counties would realize something for the taxes, rather than nothing, which is the situation at present. While no such agreement exists at this time, I make the assumption that it will be possible to reach such agreement, and