Great Plains Gasification Associates, A Partnership, Transco Coal Gas Company, A Partner Other Than The Tax Matters Partner - Page 25

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          previously indicated, these were the contractual premises for               
          termination of participation.                                               
               Although the partners terminated participation in the                  
          project, the partnership continued its legal existence.  No                 
          partner withdrew from the partnership.  The partnership’s                   
          liabilities were unaffected.  It was understood, however, that              
          the partners’ termination of participation would lead to an event           
          of default by the partnership under the loan guarantee agreement,           
          allowing DOE to assume control over the project.                            
          The Partnership Defaults on the FFB Loan                                    
               After the partners declined to contribute further equity to            
          the partnership with respect to the DOE-guaranteed financing, the           
          partnership was unable to make the deferred principal, interest,            
          and guarantee fee payments due on August 1, 1985, under the                 
          standstill agreement.  The partnership’s failure to make these              
          payments constituted an event of default under the loan guarantee           
          agreement and the mortgage.                                                 
               In August and September 1985, pursuant to the loan                     
          guarantee agreement, DOE made payments to FFB totaling                      
          approximately $1.57 billion.  This sum represented the entire               
          amount of principal and interest that the partnership owed FFB              
          under the credit agreement and that correspondingly became due              
          from DOE under the loan guarantee agreement.  Upon paying these             
          amounts due under the loan guarantee obligations, DOE became                






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Last modified: May 25, 2011