Judge Likely To Ok Pegasus Proposal

The future of Pegasus Gold Inc. will remain in limbo for two more weeks, but a judge left no doubt Monday that the company’s reorganization would be approved.

“I am not likely to go beyond Dec. 22. That will be the final day,” U.S. Bankruptcy Judge Gregg Zive said. “That’s right before the holidays and people need to know what’s going on in their lives.”

Spokane-based Pegasus filed for Chapter 11 bankruptcy protection on Jan. 16. It wants to form a new company named Apollo Gold that consists of Pegasus Gold International along with three profitable mines, Montana Tunnels and Diamond Hill in Montana and Florida Canyon in Nevada.

Fourteen other subsidiaries would be liquidated and their proceeds divided among creditors.

Two final objections to that plan were withdrawn on Monday and Zive said he would approve it Dec. 22.

The company filed for bankruptcy protection after a combination of dismal gold prices, high production costs and equipment failures at its Mt. Todd Mine in Australia left it with a $512.8 million loss for 1997.