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09/21/98 14:43 FAX 3037962777 BLRNS FIGA & WILL 005/012 <br /> f <br /> MCR BANKRUPTCY FILING <br /> 9. On February 12, 1992, MCR filed a Chapter 11 reorganization proceeding under <br /> r. <br /> 11 U.S.C. §§ 1 101 - 1113 (part of the federal Bankruptcy Code) in the United States Bankruptcy <br /> Court for the District of Colorado. This filing was docketed as In re Mid-Continent Resources, Inc., <br /> T.LX 3 6-1 4 751 93, Debtor, assigned Case No. 92 11659 PAC and assigned to the Honorable <br /> Patricia A_ Clark. Both Pitkin County and DMG were named creditors in the bankruptcy <br /> ' r <br /> proceeding. <br /> 10. DMG, like Plaintiff Pitkin County,was a party to the MCR bankruptcy proceeding y' <br /> from the onset. <br /> M&E/KING CONTRACT 1. <br /> N <br /> I <br /> 11. On July 24, 1992, pursuant to I 1 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 S300,000 from M&E ("Motion for Authorization to <br /> Employ Equipment Liquidators, and to Obtain Crcdit Secured by Senior Lien"), pursuant to 11 <br /> U.S.C. § 364(d)(1),to finance mine mothballing on a short term basis. <br /> 12. The motion to employ M&E was supplemented by a subsequent "Supplement to is <br /> Motion for Authorization to Employ Equipment Liquidators, and to Obtain Credit Secured by E <br /> Senior Lien", dated August 13, 1992. This supplement had as an exhibit a proposed contract <br /> between MCR and M&E that had been reviewed in detail by counsel for the Creditors' Committee <br /> R <br /> and which incorporated comments of the Committee and other parties. <br /> r <br /> 13. ' Following notice as provided by the local bankruptcy rules, the Bankruptcy Court <br /> entered its "Order Authorizing Debtor [MCR] to Employ Equipment Liquidators and to Obtain <br /> Credit Secured by Senior Lien", on August 13, 1992_ Pursuant to this Order,MCR entered into the <br /> approved Contract, dated September 1, 1992,with M&B and A. M. King Industries, Inc. ("King"), <br /> jointly and severally and as joint venturers doing business for purposes of the Contract as <br /> r <br /> "M&E/King", as the MCR equipment and metal structures liquidating contractor (herein the <br /> "M&E/Kr\'G CONTRACT", Answer Exhibit 1 to Defendants' amended answer and counterclaims)_ <br /> The M&E/KING CONTRACT is specifically incorporated into the Bankruptcy Liquidation Plan <br /> confirmed by the Bankruptcy Court(Plan §§ 1.19 and 1.20). <br /> r <br /> BANKRUPTCY LIQUIDATION PLAN <br /> E. <br /> Y <br /> 14. Once the final prospective purchaser for the mine property withdrew, it-was clear ` <br /> it was not feasible to reorganize MCR under Chapter I 1 of the Bankruptcy Code. A Plan of <br /> liquidation, was developed, reviewed by the interested parties and the bankruptcy Creditors' ; <br /> Committee, and then proposed to the Bankruptcy Court. Ultimately, a SECOND AMENDED PLAN OF <br /> LIQUIDATION (herein the "Plan'') was approved and confirmed by "Order Confirming Debtor's <br /> k. <br /> r; <br /> . r <br /> AMENDEDC. <br /> -3- <br /> CIVILNO.97 Cv 131-3 THItzD-PARTY COMPLAINT <br /> F <br />