Company Press Release
SOURCE: U.S. Energy Corp.
District Court Denies Both Nukem's Motion for Satisfaction of Judgment And the Petition of U.S. Energy Corp. and Crested Corp. To Dissolve the Sheep Mountain Partnership
RIVERTON, Wyo., July 20 /PRNewswire/ -- U.S. Energy Corp. (Nasdaq: USEG - news) and its 52% owned subsidiary, Crested Corp. (OTC Bulletin Board: CBAG - news), doing business as the joint venture ''USECC'', reported today that the U.S. District Court of Colorado denied a motion filed by Nukem and its subsidiary Cycle Resource Investment Corp. (''CRIC'') seeking the entry of final satisfaction of judgment entered in favor of USECC and against Nukem. Nukem/CRIC contended that the constructive trust entered by the Arbitration Panel consisted of no more than a monetary award which they claimed was paid in June 1998 and did not include an equitable award equal to the purchase rights, uranium and profits received from certain CIS contracts. In ruling against the motion, the Court found that the Arbitration Panel's Order and Award which was confirmed by the Court and affirmed by the 10th Circuit Court of Appeals, ''Clearly retains both a constructive trust and a damage award.''
The District Court in its order clarified the Award of the Arbitration Panel when it impressed a constructive trust in favor of the SMP partnership over: 1) purchase rights for uranium (from the Commonwealth of Independent States (CIS) including Uzbekistan, Kazakhstan, and Kirgizstan); 2) uranium acquired pursuant to those rights; and 3) the profits therefrom.
Keith G. Larsen, president of U.S. Energy Corp. said, ''We now expect that Nukem will fully account to USECC for all profits derived from the purchase rights for uranium acquired by Nukem since 1992 and will continue to account in the future on any uranium Nukem will acquire from Uzbekistan, Kazakhstan and Kirgizstan so this matter can be brought to a conclusion. If Nukem and CRIC fail to do so, USECC will seek an order from the court to make them comply.''
The District Court also denied U.S. Energy's petition for dissolution, winding up and accounting of the Sheep Mountain Partners (''SMP'') and distribution of partnership's property. U.S. District Judge Babcock stated that since neither party had petitioned for dissolution before he entered the Second Amendment Judgment on June 27, 1997, the Court had no jurisdiction to hear USECC's petition for dissolution and denied the petition without prejudice. This means USECC could again file the petition for dissolution if it so desires. USECC may decide not to seek dissolution but continue as a partner in SMP and seek a full accounting from Nukem/CRIC.
Keith Larsen further stated that, ''With the clarification in the Order, it appears now to be in the best interests of USECC to continue as a SMP partner and participate with Nukem in administering these very valuable CIS purchase rights.'' Nukem recently announced that the Kazakhstan contract has been extended for an additional 10 years. ''With the recent ruling from the International Trade Commission allowing Kazakhstan uranium to be sold in the U.S. without restriction, these contracts are even more lucrative. In earlier court proceedings, Nukem's attorneys had indicated that the CIS contracts involved the marketing of in excess of 72 million lbs. U3O8. With Nukem's recent announcement of the amendment to the Kazakhstan contract for an additional 25 million lbs. of uranium, this would bring the total to nearly 100 million lbs. of uranium. Thus, SMP (the partnership between USECC and Nukem/CRIC) could become one of the leading suppliers of uranium to the world nuclear power industry,'' Mr. Larsen concluded.
SOURCE: U.S. Energy Corp.
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