1994-01-31_GENERAL DOCUMENTS - C1981017 (3)

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Cheryl A. Linden February 1, 1994 Page 3 issues may arise as a result of disturbances created by the Board's contractor, and Resources cannot take responsibility for such disturbances. Chapter 11 Plan As drafted, Resources' Chapter 11 Plan proposes to liquidate assets within a timeframe that will permit the timely performance of reclamation. The Rockdust Plant can be liquidated this Spring for an amount which will pay for most of the reclamation work that would be performed this year under any realistic reclamation schedule. The Plan also would pledge to the Board about 70% of the liquidation proceeds from other assets which are not now pledged to secure reclamation. This pledge would be up to an amount which would fully fund the reclamation bond. Later in the year, but well within the reclamation season, additional proceeds from sale of the Carbondale Industrial Park should become available, in an amount sufficient to fund reclamation well into 1995. The Plan recognizes that performance of the reclamation plan will require several years, no matter what. It appears that the Division recognizes this as well. We were advised by the Board on January 26 not only that the Plan is unacceptable, but that the Board would not even respond to the proposal. It is difficult to respond to the Board's and the Division's concerns because there is never a clear statement from either as to what would be acceptable. The Plan filed on January 18 was our attempt to respond to concerns mentioned by Mike Long at our meeting on January 10. Based on what we heard at that meeting, both Dean Massey and I believed that the new Plan would lead to a settlement with the State. Obviously we were mistaken. Based on our January 26 meeting, we assume that the Division and Board will reject the Chapter 11 Plan in its present form. We expect the Plan to go out for a vote in early February, with a voting deadline of about March 15. We suggest that the State hold off voting on the Plan until we are closer to the voting deadline, and that we use that time to see whether the Plan can be modified in a way that would make the Plan acceptable to the State. Plans may be modified at any time prior to confirmation. Despite the absence of any real negotiations, we want to comment on several matters that came up at the January 26 meeting. First, some members of the Board suggested that they might look at the Plan differently if substantial funds were made available immediately, rather than over time. Such funds do not exist from Resources, and we have been advised that such funds do not exist