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respective court pursuant to a cross-border insolvency protocol
agreement.
On October 24, 1997, Mr. Rendall filed a proof of claim in
the Canadian bankruptcy, which included his unsecured claim for
the $2 million loan. That claim was disallowed, whereupon, on
December 1, 1997, he filed a motion objecting to the claim
disallowance in which he contested the bankruptcy court’s
treatment of the $2 million loan as a debenture rather than as an
unsecured claim. Ultimately, on September 9, 1998, in
satisfaction of his $2 million claim (plus accrued interest) in
the U.S. bankruptcy, Mr. Rendall received 5,728,767 shares of new
common stock of Solv-Ex. The number of shares was determined
under a formula applicable to certain convertible debenture
holders that was set forth in the Second Amended Plan of
Reorganization for Solv-Ex, dated June 23, 1998 (the plan of
reorganization), and was based upon the closing bid price per
share on the date immediately preceding the date of conversion,
which turned out to be 50 cents a share.
During the course of the joint bankruptcies, Solv-Ex sold
its interest in the leases and its oil production facilities and
equipment in Canada to two separate buyers: (1) A 78-percent
interest to Koch Exploration Canada, Ltd. (Koch), in exchange for
Can$30 million, with Koch also receiving warrants (exercisable
for a limited time) to purchase 2 million shares of Solv-Ex
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