Bankruptcy Court OKs ASARCO Disclosure Statement
The U.S. Bankruptcy Court in Corpus Christi, Texas on Sept. 23 tentatively approved ASARCO LLC's disclosure statement, subject to final approval in the form of an order, finding that it contains adequate information and can be used to explain and solicit creditor votes for its chapter 11 reorganization plan.
Plan confirmation is expected to occur at the conclusion of hearings that will begin the week of Nov. 17.
The court also tentatively approved, subject to final approval in the form of an order, the disclosure statement filed by ASARCO's parent companies, ASARCO Inc. and Americas Mining Corp., which have filed a competing plan. Creditors will receive a ballot to vote for or against one or both plans, and, if voting in favor of both, to express a preference between the two plans. If the court finds that both plans are confirmable, it must look at the expressed preferences of creditors and equity in determining which plan to confirm.
"The plans are markedly different," said Joseph F. Lapinsky, president and chief executive officer of ASARCO LLC. "Our parents' proposal is a time-consuming litigation plan, as our major creditors have repeatedly stated. Ours, by contrast, is a comprehensive settlement plan." This global settlement culminated from three long years of negotiation, litigation, and mediation by ASARCO and its major creditors. It was finally achieved under the guidance of a federal bankruptcy judge from Louisiana who was appointed as a mediator in the case.
The federal government has described this as "the most complicated environmental bankruptcy in United States history." As part of the global settlement under ASARCO's plan, the company will give $1.6 billion in cash plus interests in a litigation trust to federal and state governments to pay its fair share of environmental liability at over 75 sites across the country -- making this the largest environmental settlement in history.
"ASARCO's payments will infuse much-needed cash into federal and state coffers, allowing governments to clean up some of the largest sites on the Superfund National Priorities List," stated Lapinsky.
ASARCO is an integrated copper mining, smelting, and refining company with approximately 2,600 employees. The company operates three mines, associated mills, and a smelter in Arizona and a refinery complex in Texas, which includes plants that produce copper rod and cake, precious metals, and byproducts.