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

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Cheryl A. Linden February 1, 1994 Page 5 Board would receive, under the Plan, - cash proceeds from the bankruptcy estate which should be sufficient to complete the reclamation plan. These proceeds would not be available to the Board under any alternative to the Plan. Please advise whether the Board and Division would accept the Plan if distributions were not conditioned on a deferral of the Division's litigation. In the meantime, we are sending the Plan out for a vote without making this modification. We cannot continue to make Plan modifications, just to find out that we haven't yet guessed what all the of Board's concerns are. As noted previously, if we can reach agreement during the voting period, we can amend the Plan at that time. Foreclosure on Rockdust Plant At the January 26 meeting, the Board stated its intention to seek relief from stay to foreclose on the Rockdust Plant which secures the reclamation bond. Since the beginning of the bankruptcy case, Resources has stated its willingness to consent to such relief from stay if that becomes the Board's desire. If the Board files a motion for relief from stay, the Court typically will act on the motion in approximately thirty days. A stipulation between the debtor and a creditor for relief from stay must be and this process takes about three noticed to other creditors, weeks. If you desire to have Resources stipulate to relief from stay, please prepare a stipulation for my review. Otherwise, you are free to file your motion. The Board also inquired as to whether Resources would be willing to convey a deed to the Rockdust Plant in lieu of foreclosure. On reflection, the answer is no, because it would not eliminate the need for foreclosure. There are numerous liens on the property which are junior to the MLRB, and a deed in lieu of foreclosure would not cleanse the property of these liens. The property will not be marketable so long as these liens remain on the property. Outside of bankruptcy, the only way to cleanse the property of junior liens is through foreclosure. Please note that the completion of a foreclosure may be delayed by redemption periods. Pursuant to C.R.S.junior lienors have an opportunity to redeem, with ten days8being given to the first junior lien and five days being given to subsequent lienors. My review of the title indicates that the first junior lien is Sanwa and that after Sanwa there are thirty- three judgment liens.