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foreclosure procedures”. The memo indicated that Mr. Smith had
already spoken with Tenneco and Pacific “both of whom did not
want to participate in an appeal, and therefore did not want to
have the partnership itself file an appeal”.
By this time, the foreclosure sale of the project assets,
previously scheduled for June 30, 1986, was imminent. In a June
24, 1986, meeting with DOE General Counsel Farrell, ANRC made a
final proposal. An introductory page of bullet points regarding
the proposal bore the caption “THE PLANT UNDER PRESENT
CIRCUMSTANCES IS WORTHLESS”. The proposal included an immediate
$100 million payment to DOE, additional cash infusions of $40
million from current partners, and a $90 million letter of credit
for project working capital. The proposal also contemplated that
a significant part of the project’s cashflows would be applied to
pay down the DOE debt. The proposal identified ANRC, Transco
Energy, and Pacific as the “participating partners”. In a letter
dated June 25, 1986, DOE General Counsel Farrell summarily
rejected this final proposal.
A June 26, 1986, Transco interoffice memorandum indicated
that, on the basis of conversations with ANR personnel, ANR “does
not plan to submit a revised proposal because in their view it
would be futile - unless a favorable signal and change in
direction comes from the DOE within the next two working days.
P.S. - In short, it sounds like the gig is up”.
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