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accorded the status of a general unsecured claim in the Debtor's <br /> bankruptcy. Finally, if the transaction closed, Crystal Springs <br /> was to receive no repayment of its mothball advances. <br /> The remaining 25% of the mothball expenses were advanced <br /> by Minerals, secured by a post-petition lien immediately junior to <br /> the lien granted to Crystal Springs. Funds advanced by Mid- <br /> Continent Mineral were due and payable without interest on the <br /> earliest of certain specified dates including the effective date of <br /> a plan confirmed in the Debtor's Chapter 11 bankruptcy case. <br /> Despite the Court's approval of post-petition financing on the <br /> above terms, the Plan provides that Mid-Continent Minerals shall <br /> receive or retain nothing under the Plan on account of its post- <br /> petition loans to the Debtor. <br /> The Terms Sheet originally required Crystal Springs and <br /> the Debtor to execute a formal agreement no later than April 10, <br /> 1992. By mutual agreement the parties extended the deadline <br /> numerous times and continued negotiations. The last agreed upon <br /> deadline was July 15, 1992. Geneva reported that it had concluded <br /> that the economics of operating the Mine did not justify continuing <br /> the sale process, and on July 17, 1992, Crystal Springs provided <br /> written notification to the Debtor that it was terminating <br /> negotiations. Because negotiations were terminated by Crystal <br /> Springs, the Debtor is not obligated to repay Crystal Springs' <br /> advances on a senior lien or priority basis. <br /> Termination of negotiations with Geneva, the absence of <br /> other prospective purchasers, and the inability of the Debtor and <br /> its affiliates to continue funding mothball expenses signaled a <br /> close to the sale process begun in early 1991. The Debtor <br /> concluded that it would be necessary to begin liquidation of its <br /> assets and permanently close the Mine. See Sections II.B, "Sales <br /> of Equipment, " on page 10 below, and II.C, "Sales of Real <br /> Property, " on page 11 below. <br /> In January 1993, after liquidation of the Debtor's real <br /> and personal property had begun, a newly-created Utah firm, <br /> Redstone Development Company, expressed interest in purchasing the <br /> Mine. Redstone Development offered to purchase all assets of the <br /> company for $6 million, less amounts paid previously by other <br /> buyers for the Debtor's equipment and real property. Further, <br /> Redstone Development offered to assume responsibility for <br /> reclamation of the Debtor's Mine. Redstone Development's offer <br /> compared favorably with the Debtor's estimations of amount to be <br /> generated from liquidation, particularly after accounting for costs <br /> of reclamation. <br /> Liquidation of the Debtor's assets was temporarily <br /> suspended pending further negotiations. Negotiations collapsed and <br /> liquidation was resumed in March 1993 when Redstone Development <br /> 9 <br />