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failed to obtain appropriate financing to provide for a cash <br /> purchase and the posting of a reclamation bond. <br /> B. Sales of Equipment <br /> Concurrent with its efforts to sell the Mine as an <br /> operating property, the Debtor contacted several potential <br /> liquidators regarding the removal and sale of equipment in the <br /> event that it became necessary to liquidate the Mine on a piecemeal <br /> basis. <br /> Following the termination of negotiations with Geneva, <br /> the Debtor filed a motion to employ Machinery & Equipment Co. , Inc. <br /> of San Francisco, California ( "M&E" ) to remove and liquidate the <br /> Debtor's economically salvageable personal property (the <br /> "Equipment) in accordance with a contract between the Debtor and <br /> M&E (the "M&E Contract) . The motion also requested authorization <br /> to borrow money from M&E secured by a senior lien on property of <br /> the estate. <br /> The Debtor's decision to proceed with M&E was based not <br /> only on terms of compensation but on the Debtor's evaluation of <br /> which liquidator could get the best net result for the creditors. <br /> M&E has no connection to the Debtor, its affiliates, or their <br /> officers, directors, or shareholders. <br /> The motion was approved in August 1992, authorizing the <br /> Debtor to employ M&E to remove, dismantle, prepare for sale, market <br /> and sell the Equipment from the underground and surface facilities <br /> at the Mine site. The Debtor was further authorized to obtain up <br /> to $300,000 of credit from M&E, secured by a senior lien on the <br /> Debtor's equipment except for specifically excluded equipment <br /> securing liens in favor of Caterpillar Financial Services and the <br /> State of Colorado Mined Land Reclamation Board. <br /> Advances from M&E to the Debtor's bankruptcy estate were <br /> for the purpose of keeping the Mine pumped and ventilated during <br /> removal of underground Equipment and to cover other costs of <br /> Equipment removal and preparation. The Debtor was obligated to <br /> reimburse M&E for such advances on a dollar for dollar basis out of <br /> the first net sale proceeds from sale of the Equipment. All such <br /> advances have in fact been reimbursed. <br /> Removal of the Equipment from underground was completed <br /> around the end of September 1992 and the pumping and ventilating <br /> program was terminated. The Mine thus was allowed to flood, making <br /> the Mine and the equipment remaining in the Mine inaccessible. At <br /> that point, the cessation of mining activities became permanent, <br /> and the Debtor began work on final reclamation of the Mine. See <br /> Section II.D, "Reclamation of the Mine Site, " on page 12 below. <br /> 10 <br />