1994-03-07_GENERAL DOCUMENTS - C1981017

Home Browse Search

FRGf*1'': Panasonic TAD/FAX PHONE NO. 9454958 Mar. 07 1994 11:29AM P03 Cheryl A. Linden March 2, 1994 Page 2 exist the State needs to deal with the situation as it exists. Resources' assets are worth what they are worth. If, the Plan is confirmed and Resources' assets turn out to be unmarketable, the State will be free to pursue other remedies, if any, including the pending litigation against so-called "agents" of the mining permittee. If the assets turn out to have considerable value, as Resources believes, the dividend for the State will be sufficient to fund the approved reclamation plan. On the, other hand, if Plan confirmatiQz,J.U-.blocked by the State, it is foreseeable that the case will be dismissed. It is likely that Sanwa then will foreclose its senior liens on Resources' equipment and certain real estate, including the Carbondale Industrial Park. Sanwa thus would realize. value which under the Plan would have gone to the State. Other assets would be likely to remain in limbo for years to come. Denial of confirmation thus is contrary to the State's interests. Denial of confirmation also is contrary to the State's interests in the litigation against the so-called "agents. " While the State's position is that the liability of the "agents" is joint and several with the mining permittee, the defendant's view, as I understand it, is that the mining permittee is responsible for carrying out reclamation. In February, the DMG's own hearing officer found that Resources is "contemporaneously reclaiming" the mine site, and that the current reclamation schedule needs to be "realistically adjusted. " The Chapter 11 Plan provides funds sufficient to carry out the approved reclamation plan according to a realistically adjusted schedule. If the State spurns the funds being offered under the Plan, the defendants surely will argue that the State has failed to mitigate damages. I would go beyond that and argue that in an equitable proceeding, the State is not entitled to create a problem by blocking efforts of the mining permittee to reclaim its mine, and then to require the permittee's "agents" to fix the problem created by the State's own action. Turning to the efforts to sell certain assets, we now anticipate filing a- motion to sell the equipment and structures at the Rockdust Plant to Pete Lien for $300,000, and the real property to Mid-Valley Design for $200,000. The second offer exceeds the offer from Dale Eubank which I discussed with you several days ago. Both offers are cash offers payable upon closing as soon as Bankruptcy Court approval is obtained. I hope to file the sale motion with the Bankruptcy Court tomorrow.