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preparation plant in Coal Basin.Coal mined and cleaned in Coal Basin was hauled by truck <br /> to the Carbondale, Colorado Coal Loadout and shipped by rail to MCR customers. <br /> 8. Following a devastating underground fire in the Dutch Creek No.2 Mine in <br /> 1990, MCR ceased all mining operations on January 25, 1991. Except for skeleton <br /> maintenance and patrolling crews—"mothballing"personnel —all mining personnel were <br /> terminated. <br /> 9. Following shutdown of mining operations,MCR began efforts to sell its Coal <br /> Basin mining operation, including real and personal property used in connection with its <br /> underground coal mining operation. <br /> MCR BANKRUPTCY FILING <br /> 10. On February 12, 1992, MCR filed a Chapter 11 reorganization proceeding <br /> under 11 U.S.C. §§ 1101 - 1113 (part of the federal Bankruptcy Act) in the United States <br /> Bankruptcy Court for the District of Colorado.This filing was docketed as In re Mid-Continent <br /> Resources,Inc., T.I.N.36-1475193, Debtor,assigned Case No.9211659 PAC and assigned to the <br /> Honorable Patricia A. Clark Both Pitkin County and DMG were named creditors in the <br /> bankruptcy proceeding. <br /> 11. DMG, like Plaintiff Pitkin County, was a party to the MCR bankruptcy <br /> proceeding from the onset. <br /> M&MNG CONTRACT <br /> 12. On July 24,1992,pursuant to 11 U.S.C.§327,MCR petitioned the Bankruptcy <br /> Court for authority to employ Machinery&Equipment Co.,Inc.("M&E")to liquidate MCR's <br /> mining equipment and authorization to borrow $300,000 from M&E ("Motion for <br /> Authorization to Employ Equipment Liquidators, and to Obtain Credit Secured by Senior <br /> Lien"),pursuant to 11 U.S.C. §364(d)(1),to finance mine mothballing on a short term basis. <br /> 13. The motion to employ M&E was supplemented by a subsequent <br /> "Supplement to Motion for Authorization to Employ Equipment Liquidators,and to Obtain <br /> Credit Secured by Senior Lien",dated August 13,1992.This supplement had as an exhibit a <br /> proposed contract between MCR and M&E that had been reviewed in detail by counsel for <br /> the Creditor's Committee and which incorporated comments of the Committee and other <br /> parties. <br /> 14. Following notice as provided by the local bankruptcy rules,the Bankruptcy <br /> Court entered its "Order Authorizing Debtor [MCR] to Employ Equipment Liquidators and to <br /> Obtain Credit Secured by Senior Lien",on August 13,1992.Pursuant to this Order,MCR entered <br /> CIVIL No.97 cv 131-3 -3- THIRD-PARTY COMPLAINT <br />