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MCR 1992 Bankruptcy Filing <br /> 58. 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- <br /> Continent Resources, Inc., T.I.N. 36-1475193, Debtor, assigned Case No. 92 11659 PAC and <br /> assigned to the Honorable Patricia A. Clark Pitkin County was a named creditor in the <br /> bankruptcy proceeding from its outset (see Answer Exhibit 7, described in Answer ¶ 135, <br /> post). <br /> 59. After commencing the Chapter 11 bankruptcy proceeding and the <br /> Bankruptcy Court's appointment of a Creditor's Committee (11 U.S.C. § 1102), significant <br /> efforts were made to sell MCR's Coal Basin mine property.There was genuine interest in <br /> purchasing the property as an operating mining unit. <br /> 60. During the attempted sale period, monies were necessary to address the <br /> expense of "mothballing" the mine property and its assets. Mothballing expenses <br /> aggregated approximately$150,000 per month. For a limited time part of the mothballing <br /> expense (75%) was paid by Crystal Springs Coal, Inc. ("Crystal Springs", a subsidiary of <br /> Geneva Steel, Geneva, Utah, and one of MCR's principal coal customers) while Crystal <br /> Springs performed due diligence in connection with potentially acquiring MCR's Coal Basin <br /> mine property. <br /> 61. Failure to sell the Coal Basin mine property and an end of Crystal Springs <br /> interest in purchasing the mine property required MCR to reconsider the direction of the <br /> bankrupt estate administration. MCR concluded that it was not possible to sell the mine <br /> property,and it began to plan for liquidation of bankrupt estate assets and reclamation of <br /> the mine property as required by state and federal law. <br /> 62. On July 17,1992,Crystal Springs notified MCR it was terminating its efforts <br /> to purchase the Coal Basin mine property which included its obligation to partially fund <br /> mothball expenses incurred after that date. <br /> M&E/KIN\G CONTRACT <br /> 63. On July 24, 1992, pursuant to 11 U.S.C. § 327, MCR petitioned the <br /> Bankruptcy Court for authority to employ Machinery& Equipment Co., Inc. ("M&E") to <br /> liquidate MCR's mining equipment and authorization to borrow $300,000 from M&E <br /> ("Motion for Authorization to Employ Equipment Liquidators, and to Obtain Credit <br /> Secured by Senior Lien"),pursuant to 11 U.S.C.§364(d)(1),to finance mine mothballing on <br /> a short term basis. <br /> CIviL No.97 cv 131-3 -7- AMENDED AN sWER&COUNTERCLAIMS <br />