Case AJC Doc 262 Filed 08/19/11 Page 1 of 4

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1 Case AJC Doc 262 Filed 08/19/11 Page 1 of 4 In re: UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION MERENDON MINING (Nevada), INC. a/k/a Milowe Brost, Debtor. / Case No.: BKC-AJC Chapter 7 TRUSTEE'S MOTION TO APPROVE SETTLEMENT WITH THE ESTATE OF HAROLD CALDWELL THROUGH ITS PERSONAL REPRESENTATIVE, DAWN CALDWELL FEDRIGON, AND DAWN AND MICHAEL FEDRIGON [Hearing Requested for 9/19/11 at 10:00 a.m.] Any interested party who fails to file and serve a written response to this motion within 21 days after the date of service stated in this motion shall, pursuant to Local Rule (D), be deemed to have consented to the entry of an order in the form attached to this motion. Any scheduled hearing may then be canceled. MARCIA DUNN, as Chapter 7 Trustee (the Trustee ) for the bankruptcy estate of MERENDON MINING (Nevada), INC. (the Debtor ), by and through undersigned counsel, pursuant to Bankruptcy Rule 9019 and Local Rule (D)(3)(b), files this Motion to Approve Settlement with the Estate of Harold Caldwell through its Personal Representative, Dawn Caldwell Fedrigon, and Dawn and Michael Fedrigon (collectively, the Claimants ), as set forth in the Settlement Agreement, a true and correct copy of which is attached as Exhibit A, and in support states as follows: 1. The Trustee through the substantively consolidated entity Sentinel Mining Corporation is the holder of record title to certain real properties located in Gilpin County, Colorado, commonly referred to as the Glory Hole Mining Properties. The Claimants claim an interest in the Glory Hole Mining Properties. The Trustee and the Claimants are collectively referred to herein as the Parties.

2 Case AJC Doc 262 Filed 08/19/11 Page 2 of 4 2. The Parties have agreed to resolve this dispute pursuant to the terms of Exhibit A. A further recitation of the facts preceding this settlement is set forth in the agreement. 3. "[A]pproval of a settlement in a bankruptcy proceeding is within the sound discretion of the court. In re Arrow Air, Inc., 85 B.R. 886, 891 (Bankr. S.D. Fla. 1988), citing Rivercity v. Herpel (In re Jackson Brewing Co.), 624 F. 2d 599, (5th Cir. 1980), Anaconda-Ericsson, Inc. v Hessen (In re Teltronics Services Inc.), 762 F.2d 185, 189 (2d Cir. 1985), and In re Prudence Co., 98 F.2d 559 (2d Cir. 1938), cert. denied sub nom. Stein v. McGrath, 306 U.S. 636 (1939). 4. In assessing whether a proposed settlement should be approved pursuant to Bankruptcy Rule 9019, the court should consider (a) the probability of success in litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved and the expense, inconvenience and delay necessarily attending it; and (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises. In re Justice Oaks II, Ltd., 898 F. 2d 1544, 1549 (11th Cir. 1990), cert. denied, 498 U.S. 959 (1990). 5. In analyzing the proposed settlement agreement, the applicable test is whether the proposed settlement "falls below the lowest point in the range of reasonableness." Anaconda Ericsson, Inc. v. Hessen (In re Teltronics Services Inc.), 762 F.2d 185, 189 (2d Cir. 1985); Newman v. Stein, 464 F. 2d 689, 693 (2d Cir.), cert. denied, 409 U.S (1972); Cosoff v. Rodman (In re W.T. Grant Co.), 699 F.2d 599, 608 (2nd Cir.), cert. denied, 464 U.S. 822 (1983). 6. The Complexity of Litigation. The dispute over the Glory Hole Mining Properties spans many years of state court proceedings in both Colorado and Texas. Trustee s counsel 2

3 Case AJC Doc 262 Filed 08/19/11 Page 3 of 4 believes that there are complex legal and factual issues regarding how Sentinel obtained title to the Glory Hole Mining Properties and whether such conveyance to Sentinel was effective. 7. The Probability of Success. Resolution of this dispute would involve additional litigation for which the outcome is uncertain. The Estate is currently administratively insolvent, and the expense and the difficulty of the litigation weigh in favor of the settlement. The disputes regarding the ownership of the Glory Hole Mining Properties would have to be resolved prior to any sale of such property. 8. The Interests of the Creditors. This settlement will provide $600,000 to the Estate without further cost, and it will resolve all claims between the Trustee and the Claimants. 9. The Trustee submits that based upon the test set forth above, the proposed settlement is reasonable and in the best interests of the estate. 10. The Trustee requests this Court set a hearing on September 19, 2011 at 10:00 a.m. If no response is filed by September 9, 2011, the Trustee requests this Court enter an order approving this motion, and cancel the hearing. WHEREFORE, the Trustee seeks the entry of an order, in the form attached as Exhibit B, approving the settlement. CERTIFICATE OF SERVICE WE HEREBY CERTIFY that a copy of the foregoing was served on the 19 th day of August, 2011 to all parties registered to receive service via the Court s CM/ECF system and in accordance with the Court s Order of December 30, 2009 [D.E. # 74 in the main case], shall be posted to: DATED: August 19, 2011 GRAYROBINSON, P.A. Attorneys for Plaintiff, Marcia Dunn, \351016\4 - # v1 3

4 Case AJC Doc 262 Filed 08/19/11 Page 4 of 4 Chapter 7 Trustee 401 E. Las Olas Boulevard, Suite 1850 Fort Lauderdale, FL Phone /Fax By: /s/ Ivan J. Reich, Esq. Ivan J. Reich, Esq. Florida Bar No.: Michael D. Lessne, Esq. Florida Bar No.: \351016\4 - # v1 4

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13 Case AJC Doc Filed 08/19/11 Page 1 of 2 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION In re: MERENDON MINING (Nevada), INC. a/k/a Milowe Brost, Debtor. / Case No.: BKC-AJC Chapter 7 ORDER GRANTING TRUSTEE'S MOTION TO APPROVE SETTLEMENT WITH THE ESTATE OF HAROLD CALDWELL THROUGH ITS PERSONAL REPRESENTATIVE, DAWN CALDWELL FEDRIGON, AND DAWN AND MICHAEL FEDRIGON THIS MATTER came before the court on the Trustee's Motion to Approve Settlement with the Estate of Harold Caldwell through its Personal Representative, Dawn Caldwell Fedrigon, and Dawn and Michael Fedrigon (the Motion ). The court having reviewed the motion and proposed settlement, and finding that no objection has been filed under Local Rule (D) and that the settlement is in the best interests of the estate, it is ordered: 1. The Motion is granted and the settlement is approved. 2. The parties are directed to comply with the terms of the settlement as set forth in the motion.

14 Case AJC Doc Filed 08/19/11 Page 2 of 2 ### Submitted by: Ivan J. Reich, GrayRobinson, P.A. 401 E. Las Olas Blvd., Ste. 1850, Fort Lauderdale, FL 33301; Ph. 954/ [Mr. Reich is directed to serve a copy of this order on all interested parties and to file a certificate of service.] \351016\4 - # v1