County, state actions could turn Tunnels bankruptcy

Montana Tunnels Mining Inc.’s labyrinthine journey through the bankruptcy system may not be over just yet.

On Oct. 22, Jefferson County filed a motion with the U.S. Bankruptcy Court of Montana asking it to reverse its decision last July to dismiss Montana Tunnels’ Chapter 11 case. And within hours, Judge Benjamin Hursch, who had issued the dismissal, agreed to consider the request.

The County hopes the court ultimately will convert Montana Tunnels’ case into a Chapter 7 liquidation, which could lead to a sale of the company’s long-shuttered gold mine outside Jefferson City. In that case, as a senior creditor, the County likely would be repaid the $3.1 million it is owed in unpaid metal mining taxes.