Great Plains Gasification Associates, A Partnership, Transco Coal Gas Company, A Partner Other Than The Tax Matters Partner - Page 24

                                        - 24 -                                        
          Herrington.  Acknowledging that this action was not the fault of            
          the project sponsors or SFC, this letter stated summarily that              
          the package “would not be in the best interests of the Nation as            
          a whole” and that DOE would not support the agreement “as                   
          currently constituted”.                                                     
          Partners Terminate Participation in the Project                             
               On August 1, 1985, the partners learned of DOE’s rejection             
          of the financial assistance arrangement.  The partners were                 
          surprised and disappointed; they felt that DOE had doublecrossed            
          them by leading them on in negotiations before summarily                    
          rejecting the agreement on the very day that the project was                
          declared in-service.  The partners immediately exercised their              
          contractual rights under the partners consent and agreement to              
          decline to make further capital contributions to the partnership            
          that otherwise would have been required under the standstill                
          agreement and the loan guarantee agreement.  The written notices            
          to terminate participation, dated August 1, 1985, were based on             
          the determination of the partnership’s management committee that,           
          after Secretary Herrington’s action, there was no longer                    
          reasonable assurance that the project would generate sufficient             
          cash to permit the partnership to make timely principal and                 
          interest payments on its outstanding debt and to make                       
          distributions over a 10-year period following the in-service date           
          that were at least equal to the contributed equity.  As                     






Page:  Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  Next

Last modified: May 25, 2011