Great Plains Gasification Associates, A Partnership, Transco Coal Gas Company, A Partner Other Than The Tax Matters Partner - Page 39

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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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