Today's GV Union
Brush Creek Mining attempts to file bankruptcy
By S.E. Humphries - Tue, Oct 13, 1998
The final chapter is apparently written for Brush Creek Mining and Development Co. In a prepared statement
Monday, company officials said Brush Creek seeks funds to reorganize under Chapter 11 of the U.S.
bankruptcy code.
If the attempt to file under Chapter 11 fails, the company will cease to operate, Brush Creek Chief Executive
Officer James Chapin said in the statement.
The news halted trading of the company's stock for 20 minutes on the Nasdaq Monday morning. By the end of
the day, Brush Creek's value had plummeted to $0.125 a share. This morning, the stock was down to $0.03 on
104,500 shares.
It is unclear whether the mining company has already ceased operations. Offices in The Fairway complex on
East Main Street in Grass Valley were stripped bare of furniture, and phone calls went unanswered both
Monday and Tuesday.
The cash-strapped company ceased mining operations in July, laying off 25 workers.
On Friday, the Sierra County Tax Collector's office seized the company's bank account and attached all its
mining equipment, according to Cherry Simi, assistant treasurer-tax collector for the county.
The county seized the assets because the company had not paid unsecured personal property taxes on its
claims on federal land, Simi said, adding that Brush Creek owed approximately $95,000 in delinquent taxes,
Simi said.
Simi said the county had been in discussion with mining company officials prior to taking the legal action.
Nevada County's tax-collection office is also preparing to take action against Brush Creek. Pam Boswell with
the collections department of the office said Brush Creek was delinquent Aug. 31 when unsecured personal
property taxes were due. The company owes at least $284 in taxes, Boswell said.
Brush Creek notified the federal Security Exchange Commission Sept. 29 that it was filing its annual report
late "as a result of unexpected delays in gathering the data necessary."
In its statement, Brush Creek said it is being sued by Ruby Development Co. which holds the rights to the Ruby
and Rising Sun mines in Sierra County and its ex-partners.
Company officials blamed its former minority partner, Volcanic Resources, for the company's financial
problems. Chapin said the company has been attempting to save the company by raising funds, finding a new
partner, or merging with another company.
With no cash to operate and liens placed on properties by the county, it's unclear whether Brush Creek can
raise the money necessary to reorganize under Chapter 11.
Brush Creek incorporated in 1982 and sporadically mined a limited amount of gold ore until recently.
According to SEC documents, the company lost more than $43 million from its inception. |
