What a Difference a Judge Makes: Texas Federal Judge Says Not so Fast

According to Bloomberg News, U.S. District Judge Andrew Hanen issued an order back in August, 2008 that found Grupo Mexico SAB intentionally harmed Asarco creditors by stripping the company's stake in Sourthern Copper Corp. On April 2, 2009 Judge Hanen issued an order setting the formula for calculating damages in the suit which may result in bankrupt Asarco and its creditors receive approximately $6.31 billion dollars.

Asarco owned over 50 sites across the United States, including a lead smelter in East Helena, Montana and property in the Mike Horse area near Lincoln, Montana and other sites. Asarco ran a lead smelter operation in East Helena for decades and was a major employer of the area until its closure in 2001. The area around the smelter, including homes, lawns, schools and property are part of a massive clean up efforts by the State of Montana and aided by EPA Superfund money.

On or about March 17, 2009 Asarco and the State of Montana entered into a tentative $1.1 billion dollar settlement with Asarco for clean up efforts of all of the Montana sites. In addition, there are numerous private claims by individuals who claim health injuries from the contaminants which include asbestos, lead and other health injurious materials.

The recent decision of U.S. District Judge Andrew Hanen to set aside the fraudulent transfer by Grupo Mexico SAB, (a subsequent purchaser) of assets of Southern Copper away from the bankrupt Asarco may be significant. The implication for creditors in the bankruptcy case and for Asarco LLC which still remains in bankruptcy, but still operates three copper mines in Arizona and a smelter in Texas remains to be seen. Asarco LLC's lawyer Irwin Terrell is quoted as saying, "It's a complete victory, we are extremely pleased for Asarco and its creditors.

Sources:

Asarco LLC v. Americas Mining Corp., 1:07- cv-00018, U.S. District Court, Southern District of Texas (Brownsville). The bankruptcy case is In re Asarco LLC, 05- 21207, U.S. Bankruptcy Court, Southern District of Texas (Corpus Christi)

Bloomberg News: Steven 'Church, Sophia Perterson, Grupo Mexico May Owe Asarco $6 Billion, Lawyer Says, April 2, 2009