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Mesothelioma News | 2008
The Asarco Bankruptcy Plan Involves a $2.6 Billion Sale to Sterlite
The reorganization plan for the bankrupt Arizona copper producer, Asarco LLC, will result in that sale of $2.6 billion in assets to Sterlite Industries (India) Ltd.
Joseph F. Lapinsky, Asarco's chief executive officer, commented, "this plan will allow Asarco to emerge from bankruptcy in a fair manner for all interested parties and puts Asarco's assets under ownership of global mining company that is world-class."
After being placed in bankruptcy by parent company Grupo Mexico SAB in 2005, Asarco, a Tucson based company, has been run by an independent board. Grupo Mexico was sued by the directors and initiated a process to sell Asarco's assets under court supervision. The purchase was agreed to by Sterlite on May 31.
The company said in a statement that the reorganization plan contains agreements that Asarco is formulating with principal creditors, including the U.S. government, a committee of asbestos creditors and a representative of potential future asbestos claimants.
At the option of Asarco, secured claims will either be paid in full or reinstated under the proposed plan. After certain creditors are paid in full, bondholders' claims, also at the discretion of Asarco, will be paid a pro rata post-petition interest payment out of any available funds or reinstated.
Information on Creditor Claims
There are two groups of creditors that will be paid as much as $750 million each, those with unsecured asbestos personal injury claims and those with residual environmental claims. If funds are available, those claims will also receive a supplemental distribution of up to $102 million each. According to court documents, an Asbestos Trust will be established and will be solely responsible for the liquidation and payment of claims and demands.
Covington Land Co., one of Asarco's units, will reorganize and own certain income-producing property. According to the disclosure statement, the Asbestos Trust will own 100 percent interest in the reorganized Covington.
$243.8 million will be put in various environmental custodial trusts for property remediation and restoration under the plan.
A Corpus Christi, Texas bankruptcy judge is scheduled to hold a Sept. 23 hearing to consider approval of the disclosure statement explaining the plan and a hearing on Nov. 17 to consider approval of the plan.
