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MCR BANKRUPTCY FILING <br /> 9. On February 12, 1992, MCR filed a Chapter 11 reorganization proceeding under 11 <br /> U.S.C. §§ 1101 - 1113 (part of the federal Bankruptcy Code) in the United States Bankruptcy Court <br /> for the District of Colorado. This filing was docketed as In re Mid-Continent Resources, Inc., T.I.N. <br /> 36-1.175193, Debtor, assigned Case No. 92 11659 PAC and assigned to the Honorable Patricia A. <br /> Clark. Both Pitkin County and DMG were named creditors in the bankruptcy proceeding. <br /> 10. DMG, like Plaintiff Pitkin County, was a party to the MCR bankruptcy proceeding <br /> from the onset. <br /> M&E/KING CONTRACT <br /> '11. 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 mining <br /> equipment and authorization to borrow $300,000 from M&E ("Motion for Authorization to Employ <br /> Equipment Liquidators, and to Obtain Credit Secured by Senior Lien"), pursuant to 11 U.S.C. § <br /> 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 <br /> Motion for Authorization to Employ Equipment Liquidators, and to Obtain Credit Secured by Senior <br /> Lien", dated August 13, 1992. This supplement had as an exhibit a proposed contract between MCR <br /> and M&E that had been reviewed in detail by counsel for the Creditors' Committee and which <br /> incorporated comments of the Committee and other parties. <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&E and A. M. King Industries, Inc. ("King"), <br /> jointly and severally and as joint venturers doing business for purposes of the Contract as <br /> "M&E/King", as the MCR equipment and metal structures liquidating contractor (herein the <br /> "M&E/KING CONTRACT", Answer Exhibit 1 to Defendants' amended answer and counterclaims). The <br /> M&E/KING CONTRACT is specifically incorporated into the Bankruptcy Liquidation Plan confirmed by <br /> the Bankruptcy Court(Plan §§ 1.19 and 1.20). <br /> BANKRUPTCY LIQUIDATION PLAN <br /> 14. Once the final prospective purchaser for the mine property withdrew, it was clear it <br /> was not feasible to reorganize MCR under Chapter 11 of the Bankruptcy Code. A Plan of liquidation, <br /> was developed, reviewed by the interested parties and the bankruptcy Creditors' Committee, and then <br /> proposed to the Bankruptcy Court. Ultimately, a SECOND AMENDED PLAN OF LIQUIDATION(herein the <br /> "Plan") was approved and confirmed by "Order Con arming Debtor's Second Amended Plan of <br /> AMENDED <br /> -3- <br /> CIVIL NO. 97 CV 131-3 THIRD-PARTY COMPLAINT <br />