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Substantially all of the loan proceeds were used by the Debtor, for <br /> capital improvements, mine development, and financing operating <br /> losses. The balance of the Continental Illinois loans, with <br /> interest, eventually grew to $60.9 million. The loans were secured <br /> by consensual liens on substantially all of the real and personal <br /> property of the Debtor. <br /> In 1988, the Debtor and Minerals began work-out <br /> negotiations with Continental Illinois' successor, the FDIC. This <br /> eventually resulted in a restructuring, in April 1989, whereby the <br /> FDIC wrote off $34 .8 million of debt, Minerals and its <br /> subsidiaries paid off $5.7 million of debt, and Sanwa Business <br /> Credit Corporation ( "Sanwa" ) acquired the notes and liens of <br /> Continental Illinois with respect to the remaining loan amount, <br /> $20.4 million. <br /> At the time of the restructuring with Sanwa, the <br /> surviving debt was apportioned among the Debtor, its corporate <br /> parent, and its sister companies. The Debtor had a $1.5 million <br /> term loan and a $2 million revolving credit line. Coal & Coke had <br /> a $5 million term loan and a $10.8 million revolving credit line. <br /> Redstone Properties and Redstone Corporation each had term loans of <br /> $500,000. In addition, Minerals agreed to pay a $2 million loan <br /> origination fee. The Debtor guaranteed and cross-collateralized <br /> the obligations to Sanwa of the Debtor's parent and sister <br /> companies. Similarly, Minerals and its other subsidiaries <br /> guaranteed and cross-collateralized the Debtor's obligations to <br /> Sanwa. <br /> Although the Debtor started the lending relationship with <br /> Sanwa with only $1.5 million of debt, it immediately drew down on <br /> the revolving credit line for payment of creditors and operating <br /> expenses. Additional sums later were borrowed from Sanwa, <br /> including a second term loan in November 1989, in the amount of <br /> $7.5 million, and a third term loan in November 1990, in the amount <br /> of $2.5 million. By the time that the Debtor filed its bankruptcy <br /> case in February 1992, its direct obligations to Sanwa totalled <br /> $19.7 million, all of which Sanwa had declared to be in default in <br /> August 1991. The obligations of other corporate affiliates which <br /> were guaranteed by the Debtor brought the total obligation to $28.7 <br /> million. <br /> Several events have occurred which reduce the amount of <br /> Sanwa's claims from the $28.7 -million total listed on the Debtor's <br /> bankruptcy schedules. First, Sanwa had a claim for a loan <br /> origination fee in the amount of $2 million, which Minerals paid in <br /> full with the proceeds of a distribution from Columbine Power <br /> Services and with the proceeds of a distribution from Coal & Coke. <br /> Second, Sanwa was paid down from real estate sales by Redstone <br /> Corporation. See Section I.C. , "Intercompany Relationships, " on <br /> page 2 above. Third, Coal & Coke is paying down the Sanwa term <br /> loans by $212,000 per month, and is paying interest on all loans on <br /> 5 <br />