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

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Plan Outline May 17, 1993 Page 9 equal to Resources ' common stock. Since the Plan will distribute nothing to Resources ' common shareholder, nothing will be distributed to the former shareholders. Class Eleven: Mid-Continent Minerals, Inc. Minerals shall retain its stock in Resources, but shall otherwise receive nothing under the Plan. The stock retention permits Minerals to utilize net operating loss carry-forwards which have accumulated from Resources ' operations, to the extent permitted by applicable tax law. These carry-forwards permit tax savings which otherwise would be paid as a result of the operation of Resources ' sister corporation, Mid-Continent Coal & Coke Company ( "Coal & Coke" ) . Assuming profitable future operation by Coal & Coke, the tax savings realized through the retention of NOL's enhances Minerals ' ability to retire Sanwa's claims against Resources over a period of years (which are guaranteed by Coal & Coke) . This, in turn, permits Sanwa to give up a portion of the liquidation value of Resources ' estate to the unsecured creditors. Estimate of Distributions from Creditors ' Trust Based on valuation estimates which I have provided in prior correspondence, I estimate the value of Resources ' assets, net of costs of sale, to be as follows: equipment, $2 , 000, 000; mine site, $2, 000, 000; Carbondale industrial park, $1, 000, 000; Fabrication shop, $300, 000; Coke oven tract, $150, 000; 160 acre tract, $160, 000 (already sold) ; Unit train loadout site, $300, 000 . The total of these estimates is $5, 910,000 . All of these proceeds would flow into the Creditors ' Trust. As set forth above, I estimate payments to allowed administrative expenses to be $204 ,413 . I further assume, arbitrarily, $100, 000 of fees and costs to the Plan Trustee in administering the Creditors ' Trust. With these adjustments, the Net Liquidation Proceeds in the Creditors ' Trust are estimated to be about $5, 600, 000.