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of Sale stating that DOE had purchased the mortgaged assets of
the project for $1 billion at the public foreclosure sale.20
Objections to the Foreclosure Sale
On July 7, 1986, ANR filed with the District Court
objections to the foreclosure sale. The premise of the
objections was that the sale had been improperly conducted
without providing the partnership redemption rights under
applicable North Dakota foreclosure statutes or equitable rights
of redemption under Federal common law. On July 14, 1986, the
District Court overruled ANR’s objections and confirmed the
foreclosure sale. The court noted that “the legal entity
foreclosed upon, the partnership, has not objected to the sale”
and questioned whether ANR had standing to object.
On July 16, 1986, the Marshal issued the Marshal’s Deed to
DOE, and the deed was recorded in the local property records.
Appeal of the Foreclosure Proceedings
On June 30, 1986, ANR, as a general partner of the
partnership, filed a notice of appeal in the foreclosure
20 The $1 billion was applied to pay principal of about $891
million and accrued interest of about $109 million. Although the
record is silent on this point, it seems unlikely that any funds
actually changed hands in this transaction. Pursuant to the
indenture of mortgage, DOE was authorized to bid for and purchase
the mortgaged assets, and the trustee was directed to apply the
proceeds to repay DOE the amounts DOE had previously paid FFB
pursuant to the guarantee agreement. The net result of these
transactions would have been simply to reduce the partnership’s
obligation to DOE by $1 billion.
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