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.~ <br />-iiiiiiiiiiuiiuiii <br />sas <br />RECEIVED <br />MEMO T0: Colorado Mined Land Reclamation Board SEP 2U 2001 <br />Michael Long, Director, DMG <br />David Berry, Chief, Coal Program <br />Stephen Rrown; Esq.; Acting First Assistant Division of Minerals and Geology <br />Attorney General <br />Cheryl Linden, First Assistant Attorney General <br />Robert Comer, Esq., Denver regulatory counsel for <br />Powderhorn <br />FROM: Robert D. Clark ~G~ <br />Assistant Attorney General <br />DATE: September 18, 2001 <br />RE: Powderhorn Coal Company Bankruptcy: September <br />2001 Status Report <br />The Powderhorn Coal Company bankruptcy is rapidly <br />coming to a head. Thanks in part to our efforts, three <br />competing Chapter 11 plans of reorganization are vying for <br />confirmation: one by the Debtors, one by AEP (American <br />Electric Power Company), and one by Wexford Capital, LLC.1 <br />One of the three Plans will probably be confirmed on or <br />soon after the October 12, 2001 confirmation hearing in <br />Lexington, KY. <br />It is unlikely that this date will slip by much. <br />Under a Lender Agreement approved by the Bankruptcy Court <br />in May, the prepetition Lenders will accept -- and are <br />obligated to accept -- 870 million in cash for their <br />approximately $139 million of prepetition loans only if <br />they receive the money on or before November 1, 2001.2 Each <br />of the competing Plans hopes to avail itself of the Lender <br />Agreement: each Plan promises to pay the prepetition <br />Lenders the $60 million balance of their $70 million on or <br />before November 1. <br />The competition among the Plans and the objections to <br />confirmability of each of the three Plans which we have <br />raised have yet to bear fruit. However, the Debtors and <br />AEP and Wexford are all talking to us now. <br />1 We successfully objected to the Debtors' motion to extend exclusivity <br />(i.e., the period of time during which only the debtor is allowed to <br />present a plan of reorganization). <br />1 The Lenders have already received S10 million. Therefore, it is the <br />S60 million balance which is at stake. <br />PN Brd status report Sept 19 1 <br />