1994-07-28_GENERAL DOCUMENTS - C1981017

• Permit No: C1981017
• IBM Index Class Name: GENERAL DOCUMENTS
• Doc Date: 7/28/1994
• Doc Name: Confirmation of Resources Chapter 11 plan and receipt sale of a number of assets
• Permit Index Doc Type: General Correspondence
• Media Type: D
• Archive: No

Cheryl A. Linden
July 28 , 1994
Page 7
If the Reclamation Equipment is going to be retained, it
needs to be maintained. Section 6 . 2 . 6 of the Plan provides that
the Reclamation Equipment will be maintained from the funds
provided to the MLRB under the Plan. After September 1, 1995, or
sooner if the MLRB determines that the Reclamation Equipment is no
longer needed for reclamation purposes, the MLRB is required to
return the Reclamation Equipment to the Creditors' Trust in as good
a condition as that in which the Reclamation Equipment was provided
to the MLRB, normal wear and tear excepted.
Prior to receipt of your letter, Resources had intended
to provide for the maintenance of the Reclamation Equipment, with
costs to be reimbursed from the funds being held by the Division.
Does the Division now intend to maintain the Reclamation Equipment?
You have expressed two concerns . First, you have
suggested that some of the Reclamation Equipment may be so in need
of maintenance that use of the equipment would not be cost
effective . My understanding is that the equipment is not in such
condition, but the Plan protects the Division against being
burdened with dilapidated equipment by permitting the MLRB to
determine that such equipment should not be retained for
reclamation purposes . Such equipment would then be sold by the
Creditors' Trust . If the Division has concerns about the condition
of specific equipment, we should discuss this further.
Your second concern is that the Reclamation Equipment is
not available to the Division exclusively, but also is available to
M&E/King. The salvage contract with M&E/King does indeed provide
that the Reclamation Equipment "may be retained and utilized by
[M&E/King] and/or for reclamation uses . However, the
M&E/King contract also requires M&E/King to pay maintenance
expenses associated with M&E/King' s use of the Reclamation
Equipment, with M&E/King to recover such expenses from equipment
sale proceeds . We first should determine whether M&E/King is in
fact using any of the Reclamation Equipment at this point . If it
is, we should work out a fair allocation of maintenance expenses
between M&E/King and the Division.
Partially Performed Contracts. Last year, Resources
entered into a contract with R&G Excavating to seal mine portals .
The work is mostly, but not completely, performed, and Resources
has not made final payment . The contract is not with the Division
and thus did not go through the Procurement Code. Will the
Division approve the completion of this contract according to its
terms, or should Resources tell R&G to stop sealing mine portals
while the Division procures its own contract? Will the Division
agree to pay R&G for work performed to date, following inspection
of such work?