Case Doc 203 Filed 11/04/15 Entered 11/04/15 16:37:22 Desc Main Document Page 1 of 17

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1 Document Page 1 of 17 David E. Leta (USB #1937) Andrew V. Hardenbrook (USB #15371) SNELL & WILMER L.L.P. 15 W South Temple, Suite 1200 Salt Lake City, Utah Telephone: Facsimile: delta@swlaw.com ahardenbrook@swlaw.com Attorneys for Federal Resources Corporation and Camp Bird Colorado, Inc. IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF UTAH In re: FEDERAL RESOURCES CORPORATION and CAMP BIRD COLORADO, INC., Debtors. Jointly Administered Under Bankruptcy Case No (Chapter 11) Honorable Kevin R. Anderson THIS DOCUMENT RELATES TO: In re Federal Resources Corporation In re Camp Bird Colorado, Inc. Both Debtors NOTICE OF FILING THE DEBTORS MOTION FOR ORDER (A) APPROVING BID PROCEDURES FOR SALE OF CAMP BIRD COLORADO, INC. S MINING EQUIPMENT AND INVENTORY; (B) AUTHORIZING THE SALE OF CAMP BIRD COLORADO, INC. S MINING EQUIPMENT AND INVENTORY FREE AND CLEAR OF LIENS; AND (C) ABANDONING THE MOTION FLOW EQUIPMENT TO MOTION FLOW AND NOTICE OF HEARING (Objection Deadline: November 23, 2015) (Hearing Date: November 30, 2015 at 9:30 a.m.) PLEASE TAKE NOTICE that counsel for Federal Resources Corporation and Camp Bird Colorado, Inc., ( Debtors ) have filed their Debtors Motion for Order (A) Approving Bid

2 Document Page 2 of 17 Procedures for Sale of Camp Bird Colorado, Inc. s Mining Equipment and Inventory; (B) Authorizing the Sale of Camp Bird Colorado, Inc. s Mining Equipment and Inventory Free And Clear of Liens; and (C) Abandoning the Motion Flow Equipment to Motion Flow (the Motion ) with the United States Bankruptcy Court for the District of Utah. You may obtain a copy of the Motion from the Court s PACER document access system, or upon written request at any time before the hearing from David Leta, Snell & Wilmer, L.L.P., 15 West South Temple, Suite 1200, Salt Lake City, Utah 84101, dleta@swlaw.com. You may also obtain a copy by accessing YOUR RIGHTS MAY BE AFFECTED. You should read these papers carefully and discuss them with your attorney if you have one in this case. If you do not have an attorney, you may wish to consult with one. The Motion requests, among other things, an order a) approving Bid Procedures for the sale of Camp Bird Colorado, Inc. s mining equipment and inventory ( Equipment ); 1 b) authorizing the sale of the Equipment free and clear of liens; and c) abandoning the Motion Flow Equipment to Motion Flow Control Products, Inc. The proposed Bidding Procedures are attached hereto as Exhibit 1, and a list of the Equipment is attached hereto as Exhibit 2. The Motion Flow Equipment is generally described as a hydraulic pipe crimping machine (part # 85c-kkb, serial # 85c-112-I-050), certain pipe crimping tool dies (part #s 80c-a04, 80c-a06, 80ca08, 80c-a10, 80c-a12, 80c-a16), and a 72 hole bin (72b-cabinet). If you do not want the Court to grant the relief requested in the Motion, or you want the Court to consider your views, then you or your attorney must: 1 The proposed sale of the Equipment specifically excludes the Motion Flow Equipment and the Debtors Business Records

3 Document Page 3 of On or before November 23, 2015 file with the Bankruptcy Court a written objection to the Motion explaining your position with the Clerk of the Bankruptcy Court for the District of Utah at the following address: United States Bankruptcy Court Clerk of the Court 350 South Main Street, Room 301 Salt Lake City, UT If you mail your objection to the Bankruptcy Court for filing you must mail it early enough so that the Court will receive it on or before the Objection Deadline of November 23, You must also serve a copy of your objection or response to Debtors counsel, via , mail or hand delivery, so that the same is received by the Objection Deadline of November 23, 2015, at: Snell & Wilmer, L.L.P. Attn: David Leta 15 West South Temple, Suite 1200, Salt Lake City, Utah dleta@swlaw.com 3. Attend the Hearing before Judge Kevin R. Anderson, United States Bankruptcy Court, Room 376, 350 South Main Street, Salt Lake City, Utah 84101, on November 30, 2015 at 9:30 a.m. There will be no further notice of the hearing. Failure to attend the hearing will be deemed a waiver of your objection. / / / / / / / / /

4 Document Page 4 of 17 If you or your attorney do not take these steps, the Bankruptcy Court may decide that you do not oppose the relief sought in the Motion and may enter an order granting that relief. In the absence of a timely filed objection, the undersigned counsel may and will ask the Court to strike the hearing and enter an order approving the Motion without hearing. DATED this 4 th day of November, 2015 SNELL & WILMER L.L.P. /s/ Andrew V. Hardenbrook David E. Leta Andrew V. Hardenbrook Attorneys for Federal Resources Corporation and Camp Bird Colorado, Inc

5 Document Page 5 of 17 CERTIFICATE OF SERVICE Electronic Service (CM/ECF) I hereby certify that on the 4 th day of November, 2015, I electronically filed the foregoing document with the United States Bankruptcy Court for the District of Utah by using the Court s CM/ECF system. I further certify that the parties of record in this case, as identified below, are listed as registered CM/ECF users and will be served through the CM/ECF system: Christopher D. Bryan cbryan@garfieldhecht.com, rortell@garfieldhecht.com James Vincent Cameron tr Vince.Cameron@usdoj.gov, James.Gee@usdoj.gov;Lindsey.Huston@usdoj.gov;Suzanne.Verhaal@usdoj.gov David Dain David.Dain@usdoj.gov, katherine.tribbett@usdoj.gov Andrew V. Hardenbrook ahardenbrook@swlaw.com, jpollard@swlaw.com;docket_slc@swlaw.com Kristopher C. Kleiner kris.kleiner@nortonrosefulbright.com, cecil.kennedy@nortonrosefulbright.com Peter J. Kuhn tr Peter.J.Kuhn@usdoj.gov, James.Gee@usdoj.gov;Lindsey.Huston@usdoj.gov;Suzanne.Verhaal@usdoj.gov David E. Leta dleta@swlaw.com, wkalawaia@swlaw.com;btaylor@swlaw.com John B. Lyman john.lyman@usdoj.gov, Katherine.Tribbett@usdoj.gov John M. Macfarlane jmacfarlane@fabianvancott.com, aclark@fabianvancott.com Douglas J. Payne dpayne@fabianvancott.com, hmcewen@fabianvancott.com;smcnett@fabianvancott.com Daniel D. Price daniel.price2@usdoj.gov, emily.goodman@usdoj.gov United States Trustee USTPRegion19.SK.ECF@usdoj.gov Mail Service I further certify that on the 4 th day of November, 2015, I caused the foregoing document to be sent by first class United States mail, postage fully prepaid, to the following at the addresses set forth below: Robert D. Comer Tabor Center th Street, Suite 1000 Denver, CO James P. Murphy Murphy, Armstrong & Felton 701 Millennium Tower 719 2nd Avenue Seattle, WA Susan Mae Polk Chino-Corona Rd. Corona, CA

6 Document Page 6 of 17 Timothy S. Springer 2200 Ross Avenue, Suite 3600 Dallas, TX Louis R. Strubeck 2200 Ross Avenue, Suite 3600 Dallas, TX Greg Wilkes 2200 Ross Avenue, Suite 3600 Dallas, TX Service - I further certify that on the 4 th day of November, 2015, I caused the foregoing document to be sent by electronic mail to Richard Ciardo. I further certify that I caused the Motion and the foregoing document to be uploaded to the website /s/ Andrew V. Hardenbrook

7 Document Page 7 of 17 EXHIBIT 1

8 Document Page 8 of 17 BID PROCEDURES Set forth below are the bid procedures (the Bid Procedures ) to be employed with respect to the prospective sale(s) (the Sale(s) ) of mining equipment and inventory of Camp Bird Colorado, Inc. ( CBCI ) in connection with jointly administered cases of CBCI and Federal Resources Corporation ( FRC ) (collectively, the Debtors ), Bankruptcy Case No (the Bankruptcy Case ), pending in the United States Bankruptcy Court for the District of Utah (the Bankruptcy Court ). The Debtors will seek entry of an order from the Bankruptcy Court authorizing and approving Sale(s) of the assets to the Qualified Bidder(s) (as hereinafter defined) as the Debtors, in the exercise of their business judgment, may determine to have made the highest or otherwise best offers to purchase the Equipment (the Successful Bidder(s) ). Stalking Horse Bid The Debtors have received a stalking horse bid proposal from Richard Ciardo, or his designee (the Purchaser ) as set forth in that certain Term Sheet (the Agreement ), 3 a copy of which will be provided along with these Bid Procedures. The Purchaser has proposed to buy the mining equipment and inventory as specified in the Agreement (the Equipment ). The Equipment that Purchaser proposes to buy do not include Business Records and the Motion Flow Equipment as those terms are defined in the Agreement. Under the Agreement, Purchaser has offered to purchase the Equipment for consideration in the amount of at least $87, (the Purchase Price ) as follows: (a) $10,000 earnest money deposit, and (b) $77, to be paid no later than the third business day after the Effective Date as defined in the Motion. The Purchaser also has agreed to pay all commissions in connection with the sale, so there will be no offsets or reductions from the purchase price. In the event the Effective Date does not occur on or before November 30, 2015, the earnest money deposit is fully refundable. Reservation of Rights The Debtors reserve the right to entertain bids for the Equipment, or to sell the Equipment in other lots as the Debtors determine in the exercise of their business judgment if an alternative sale would result in the highest or otherwise best collective value for the Equipment. 3 All capitalized terms not otherwise defined herein shall have the same meaning as in the Agreement

9 Document Page 9 of 17 The Bidding Process The Debtors shall: (i) determine whether any person is a Qualified Bidder, (ii) coordinate the efforts of the Qualified Bidders in conducting their due diligence investigations of the Equipment; (iii) receive offers from Qualified Bidders; and (iv) negotiate any offers made to purchase the Equipment (collectively, the Bidding Process ). Any person who wishes to participate in the Bidding Process must be a Qualified Bidder. Neither the Debtors nor their representatives shall be obligated to furnish any information of any kind whatsoever relating to the Equipment to any person who is not a Qualified Bidder. The Debtors shall have the right to adopt such other rules for the Bidding Process which, in their sole judgment, will better promote the goals of the Bidding Process and which are not inconsistent with any of the other provisions hereof or of any order of the Bankruptcy Court. Participation Requirements Unless otherwise ordered by the Bankruptcy Court for cause shown or as otherwise determined by the Debtors in their sole discretion, to participate in the Bidding Process each person (a Potential Bidder ) must deliver (unless previously delivered) to the Debtors: i. Written evidence of a commitment for financing or other evidence of ability to consummate the proposed transaction satisfactory to the Debtors in their sole discretion; and ii. An irrevocable proposal to purchase some or substantially all of the Equipment. A Qualified Bidder is a Potential Bidder that delivers the documents described in subparagraphs (i) and (ii), whose financial information demonstrates the financial capability of the Potential Bidder to consummate the Sale, and that the Debtors determine is reasonably likely (based on availability of financing, experience and other considerations) to submit a bona fide offer and to be able to consummate the Sale if selected as the Successful Bidder. Purchaser is a Qualified Bidder. Within three (3) business days after a Potential Bidder delivers all of the materials required by subparagraphs (i) and (ii) above, the Debtors shall determine, and shall notify the Potential Bidder, whether the Potential Bidder is a Qualified Bidder. At the same time that the Debtors notify the Potential Bidder that it is a Qualified Bidder, the Debtors shall allow the Qualified Bidder to conduct due diligence with respect to the assets sought to be acquired as hereinafter provided

10 Document Page 10 of 17 Due Diligence The Debtors shall afford each Qualified Bidder reasonable due diligence access to the assets sought to be acquired. The Debtors will coordinate all reasonable requests for additional information and due diligence access from such bidders. The Debtors shall not be obligated to furnish any due diligence information after the Bid Deadline (as hereinafter defined). Neither the Debtors nor any of their representatives are obligated to furnish any information relating to the Debtors assets to any person except to a Qualified Bidder that makes an acceptable preliminary proposal. Bidders are advised to exercise their own discretion before relying on any information regarding the Debtors assets provided by anyone other than the Debtors or their representatives. To the extent a Qualified Bidder wishes to inspect the Equipment, it must provide the Debtors with an executed indemnification that indemnifies and holds the Debtors harmless for any injury or damage that may arise to said Qualified Bidder in connection with any inspection of the Equipment. Bid Deadline A Qualified Bidder that desires to make a bid shall deliver a written copy of its bid to the Debtors as follows: David E. Leta, Snell & Wilmer L.L.P., Attorneys for Federal Resources, Inc. and Camp Bird Colorado, Inc., 15 W. South Temple, Suite 1200, Salt Lake City, Utah 84101, by no later than five (5) business days before the Sale by 4:00 p.m. (Prevailing Mountain Time) (the Bid Deadline ). Counsel for the Debtors shall immediately deliver all bids received to counsel for the Purchaser. With the consent of the Purchaser, the Debtors may extend the Bid Deadline once or successively, but it is not obligated to do so. All bids must include the following documents (the Required Bid Documents ): A letter stating that the bidder s offer is irrevocable until the earlier of (i) two (2) business days after the Equipment upon which the bidder is bidding have been disposed of pursuant to the Bid Procedures; or (ii) thirty (30) days after the Sale Hearing. An executed form of asset purchase agreement in form and substance acceptable to the Debtors (the Asset Purchase Agreement ). Written evidence of a commitment for financing or other evidence of ability to consummate the proposed transaction satisfactory to the Debtors in their sole discretion. Deposit of $10,000, which shall be held by the Debtors until the Bankruptcy Court approves the sale of the Equipment. The Debtors will consider a bid only if the bid is on terms that are not conditioned on obtaining financing or on the outcome of unperformed due diligence by the bidder. A bid received from a Qualified Bidder that includes all of the

11 Document Page 11 of 17 Required Bid Documents and meets all of the above requirements is a Qualified Bid. "As Is, Where Is" The sale of any of the Equipment shall be on an as is, where is basis and without representations or warranties of any kind, nature, or description by the Debtors, their agents or the Debtors estates. All of the Debtors right, title and interest in and to the Equipment shall be sold free and clear of all pledges, liens, security interests, encumbrances, claims, charges, options and interests thereon and there against (collectively, the Interests ) in accordance with 363 of the Bankruptcy Code, with such Interests to attach to the net proceeds of the sale(s) of the assets. Each bidder shall be deemed to acknowledge and represent that it has had an opportunity to inspect and examine the assets and to conduct any and all due diligence regarding the assets prior to making its offer, that it has relied solely upon its own independent review, investigation and/or inspection of any documents and/or assets in making its bid, and that it did not rely upon any written or oral statements, representations, promises, warranties or guaranties whatsoever, whether express, implied, by operation of law or otherwise, regarding the assets, or the completeness of any information provided in connection therewith or the Auction, except as expressly stated in these Bid Procedures or, as to the Successful Bidders, the respective Asset Purchase Agreement(s). Auction After all Qualified Bids have been received, the Debtors shall conduct an auction (the Auction ) with respect to any Equipment as to which a Qualified Bid has been received. The Auction shall take place on, at a.m./p.m. (Prevailing Mountain Time) (the Bid Deadline ) at the offices of the Debtors counsel, 15 W. South Temple, Suite 1200, Salt Lake City, Utah Qualified Bidders may participate in the Auction by telephone. In particular, the Debtors may commence the Auction by entertaining bids for the Equipment or groupings of certain of the Equipment of the Debtors. The Debtors thereafter may offer the Equipment in such lots in such successive rounds as the Debtors determines to be appropriate so as to obtain the highest or otherwise best bid or combination of bids for the assets. The Debtors also may set opening bid amounts in each round of bidding as the Debtors determines to be appropriate. Purchaser has no obligation to purchase less than all the Equipment identified in the Agreement. Upon conclusion of the Auction, the Debtors shall (i) review each Qualified Bid or Bids on the basis of financial and contractual terms and the factors relevant to the sale process,

12 Document Page 12 of 17 including those factors affecting the speed and certainty of consummating the Sale, and (ii) identify the highest and otherwise best offer or group of offers for the assets (the Successful Bid(s) ). 4 At the Sale Hearing, the Debtors shall present to the Bankruptcy Court for approval the Successful Bid(s). The Debtors may adopt rules for the bidding process at the Auction that, in its judgment, will better promote the goals of the bidding process and that are not inconsistent with any of the provisions of the Bankruptcy Code, any Bankruptcy Court order, or these Bid Procedures. Acceptance of Qualified Bids The Debtors shall sell the Equipment for the highest or otherwise best Qualified Bid(s) received. The Debtors presentation to the Bankruptcy Court for approval of a particular Qualified Bid does not constitute the Debtors acceptance of the bid. The Debtors will be deemed to have accepted a bid only when the bid has been approved by the Bankruptcy Court at the Sale Hearing. Sale Hearing The Sale Hearing is presently scheduled to take place on, at a.m./p.m. before the Honorable Kevin R. Anderson at the United States Bankruptcy Court for the District of Utah, located in Courtroom 376 of the Frank E. Moss United States Courthouse, 350 South Main Street, Salt Lake City, UT The Sale Hearing may be adjourned or rescheduled without notice by an announcement of the adjourned date at the Sale Hearing. At the Sale Hearing, the Debtors shall present to the Bankruptcy Court for approval the Successful Bid(s) for the Equipment (and/or other assets of the Debtors). Following the Sale Hearing approving the Sale of the Debtors assets to a Successful Bidder(s), if such Successful Bidder(s) fails to consummate an approved sale because of a breach or failure to perform on the part of such Successful Bidder(s), the next highest or otherwise best Qualified Bid, as disclosed at the Sale Hearing, shall be deemed to be the Successful Bid and the Seller shall be authorized to effectuate such sale without further order of the Bankruptcy Court. Modifications The Debtors may: (a) determine, in its business judgment, which Qualified Bid(s), if any, is the highest or otherwise best offer; and (b) reject at any time before entry of an order of the Bankruptcy Court approving a Qualified Bid, any bid that, in the Debtor s sole discretion, is: (i) inadequate or insufficient; (ii) not in conformity with the requirements of the Bankruptcy Code, the Bid Procedures, or the terms and conditions of sale; or (iii) contrary to the best interests of the Debtor, its estate, and its creditors. At or before the Sale Hearing, the Debtors 4 Any higher or better offers must exceed the Purchaser s purchase price of $87, by at least $5,

13 Document Page 13 of 17 may impose such other terms and conditions as it may determine to be in the best interests of the Debtor s estate, its creditors and other parties in interest. Provided, however, that if no Qualified Bid is received other than the Purchaser s Agreement, the Debtors shall determine the Agreement to be the highest or otherwise best offer at the Sale Hearing

14 Document Page 14 of 17 EXHIBIT 2

15 Document Page 15 of 17 CONEX BOX #1 EQUIPMENT LIST 1. Tailing samples 2. Heaters (2) 3. Propane tanks (4, including ones attached to heaters) OUTSIDE NEAR CONEX BOX #1 1. Large corrugated metal pipe (2) CONEX BOX #2 1. Acetylene tank (100 lbs) (2) 2. Propane tank (100 lbs) 3. Spools 45 tare a. 270 ft (219 lbs) b. 170 ft c. 50 ft (92 lbs) 4. Victaulic coupling 4 inch (appx 250) 5. Microwaves 2 6. Conduit (appx 100) 7. Chains for Loader (not photographed) CONEX BOX #3 1. Cab hooks (Wire Hangings) (appx 20,000) 2. Avalanche beacons (appx 10) 3. Big foot footing forms for snow shed (appx 12) 4. Misc. Victaulic fittings a. 4 in Victaulic fittings b. Butterfly valves (16) 5. Pelcor ear protection 6. Utility chain 3/8 inch (500 ft) 7. Self-rescuers (appx 17) (not photographed) 8. First aid kit (1) (not photographed) 9. Safety files, maps (not photographed) 10. Lights (30 cnt) (not photographed) 11. Nails (not photographed) 12. HDPE Welding Rod (2 inch/4 inch) (not photographed)

16 Document Page 16 of 17 SHED 1. Hydraulic hose press 1 2. Standard utility cable (100 ft) 3. Acetylene torch 4. Acetylene torch cart 5. Valve body 6. Hydraulic cylinder 7. Tabla pump 2 inch 8. Air leg 9. Laminator 10. Misc. hydraulic fittings and other parts and pieces 11. Vices 12. Misc. belts and boots 13. Simplex aluminum jack (A1022) CONEX BOX #4 1. Misc. pipe fittings, valves, & air drill parts 2. Brass valves 3. HDPE welding rod spool 4. Misc. air and water hoses (8 inch & 5 ½ inch) 5. 5 lb fire extinguishers (4) lb fire extinguishers (6) lb fire extinguishers (2) 8. Misc. Cable Rigging 9. Pneumatic hose fitting (not photographed) 10. 7/8 inch drill steel & bits 8 ft (2), 7 ft (12), 5 ft. (12), 2 ft (8) 11. Air leg (New) ton chain come along 13. Cable come along 14. Misc. mine safety equipment (ear buds/safety glasses) 15. Re-railers 16. Misc. cable rigging OUTSIDE SHOP 1. High voltage switch gear (2) 2. Misc. parts for camelback 3. Transformers (2) 4. Willison couplers 5. Misc. parts for snow shed 6. Man car 7. 20/40 ft rail (total 350 ft) 1 The Hydraulic hose press is believed to be owned by Motion Flow, and the Debtors are seeking to abandon it back to Motion Flow. The Hydraulic hose press therefore is excluded from any sale of the Equipment

17 Document Page 17 of Bolts (appx 18 x 300) 4ft and 6ft 9. Plates (appx. 11 x 1,000) turnouts (at least 2 of which are damaged) 11. Wire mesh (8 x 25 ft) inch HDPE pipe (2,000 ft) inch HDPE pipe (3,600 ft) 14. Snow shed sets (23) appx. 18 ft wide/20 ft high 15. Mine structural steel sets (portal sets) (14) 16. #5 Rebar (8,000 lbs) SHOP 1. Heaters (2) 2. 3 storage tanks with misc. lubricants 3. Flammable storage cabinet 4. 4x8 Flat car 5. 4 ton Battery locomotive with 2 spare batteries 6. 7 ton diesel locomotive 7. Willison couplers 8. Motor (50 horsepower) 9. Motor (40 horsepower) 10. Accordion vent tubing (appx. 500 ft.) 11. Air compressor (quincy and ingersoll rand) 12. Battery chargers (2) Bearcat Z1 XT GS 14. Power cable (appx. 11,500 ft) 15. CAT IT62H Front-end loader (8,233 hrs) 16. Bucket 4 ½ yard 17. Snow plow blade 12 ft 18. Fork 19. CAT D6MXL Dozer (5,330 hrs) 20. Dodge Truck 1997/98 (128,000 miles) 21. Snow Ex Sander 22. Plywood 3 ¼ inch (75 sheets)