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subrogated to FFB’s claims. By letter dated October 9, 1985, DOE
made written demand upon the partnership for payment of all
guaranteed indebtedness, together with accrued interest from
September 30, 1985.
DOE Takes Control of the Project
After the partnership’s default, DOE assumed control of the
Great Plains project. Legal title to the project and its assets,
however, remained with the partnership. In public statements,
DOE acknowledged that it was not the legal owner of the Great
Plains project and that it would not acquire legal ownership of
the facility until there was a foreclosure sale.
By letter dated August 1, 1985, DOE invoked its option to
cause ANG, as project administrator, to continue operating the
project in substantially the same manner as had been done for the
partnership. DOE advised the pipeline affiliates that it was
substituting the Secretary of Energy for the partnership as the
seller in the gas purchase agreements.
By letter to DOE dated August 2, 1985, the partnership
acknowledged receiving a copy of DOE’s prior-day letter to ANG.
The partnership advised DOE that, in order to permit the project
administrator to carry out its duties as instructed by DOE, the
partnership would exercise no responsibility or control over the
project as of August 1, 1985. Also on August 2, 1985, the
partnership advised vendors and suppliers working for the project
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