1995-06-27_GENERAL DOCUMENTS - C1981017

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' FROM :NRTURRL 303 866 5128 1995,06-27 13:00 #221 P.O5108 Cheryl A. Linden June 27, 1995 Page 4 minimizes that possibility that the DMG will expend funds on work which is not required by the Reclamation Plan, which could give rise to litigation about whether the DMG is entitled to receive or retain distributions under the Chapter 11 Plan. MCR's concern arises as a result of your letter of July 18, 1994, which states that "Resources is still legally liable for any deficiency in the bond proceeds to cover full reclamation. " Without conceding any such liability or waiving any possible defenses, MCR is certain to resist any deficiency claims to the extent that (i) the DMG spends reclamation funds for work which is not required under the' Reclamation Plan, and (ii) the DMG's bid solicitation process results in contracts being let at an excessive cost. For example, it is my understanding that MCR entered into contracts last year to complete reclamation of the sutey pile, at a cost of less than $54,00o . When the DMG took over the project and solicited bids, the low bid. was $182, 000. Fortunately, the DMG did not accept the bid. Had it done so, it is likely that the bid would have become an issue in ,any future action by the DMG to assert a deficiency claim against MCR. To minimize disagreements about the services which the DMG procures, MCR requests (i) that it be provided with all requests for bids, including the scope of work for which bids are requested; (ii) the right to be present at pre-bid meetings, including meetings at the mine site with prospective contractors; and (iii) copies of all contracts procured by the Division. Costs of Pond Maintenance Your June 2 letter raises another issue, concerning whether the Creditors' Trust or the DMG should bear financial responsibility for sediment pond maintenance associated with the CDPS permit. Your letter asserts that neither the DMG nor the Department of Health have any responsibility to clean ponds since neither agency is the permittee under the CDPS permit. Z note that the Creditors' Trust is not the permittee either. Moreover, Section 6 .2.7 of the Chapter 11 Plan specifically provides that except for making certain equipment owned by MCR available for reclamation purposes, . "neither the Creditors' Trustee, nor the Creditors' Representatives, nor the Creditors' Trust shall have any obligation with respect to reclamation or environmental cleanup of the Mine Site. . . . "