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Debt Management Law News

December 16, 2009

Copper Giant ASARCO Emerges from Bankruptcy

After four and one-half years in Chapter 11, ASARCO, LLC emerged from bankruptcy Wednesday with the closing of a full payment reorganization plan proposed by Americas Mining Corporation (AMC) and ASARCO, Inc, wholly owned subsidiaries of Grupo Mexico SAB represented by Haynes and Boone, LLP and Milbank, Tweed, Hadley & McCloy, LLP. The plan pays all ASARCO creditors in full and returns control of the U.S. copper giant to its corporate parent, AMC.

After four and one-half years in Chapter 11, ASARCO, LLC emerged from bankruptcy Wednesday with the closing of a full payment reorganization plan proposed by Americas Mining Corporation (AMC) and ASARCO, Inc, wholly owned subsidiaries of Grupo Mexico SAB represented by Haynes and Boone, LLP and Milbank, Tweed, Hadley & McCloy, LLP. The plan pays all ASARCO creditors in full and returns control of the U.S. copper giant to its corporate parent, AMC.

The plan was developed, proposed, confirmed and closed by Haynes and Boone’s senior bankruptcy Partner Charles A. Beckham, Jr., and Bob Moore, his co-counsel with Milbank, Tweed, Hadley & McCloy, and their respective teams.

U.S. District Judge Andrew S. Hanen in Brownsville, Texas signed the confirmation order that returned control of ASARCO to AMC. The district court’s decision affirmed a recommendation from U.S. Bankruptcy Judge Richard S. Schmidt, who presided over a three-week confirmation trial in August.

Judge Schmidt recommended to Judge Hanen that the AMC plan be confirmed over a competing plan proposed by ASARCO and supported by numerous creditors and the United Steel Workers. In recommending confirmation, Judge Schmidt said closing of the parent’s plan would “culminate perhaps the most successful major bankruptcy reorganization in history."

"We worked very hard to convince both the bankruptcy court and the district court that the plan proposed by AMC presented the best recovery to the creditors of ASARCO,” Mr. Beckham said. “We are gratified that our plan was approved over a competing plan that would have taken control of ASARCO away from its parent. "We have always had faith that the courts would treat Grupo Mexico fairly and would conclude that the Grupo Mexico plan gives the company the brightest possible future while treating creditors and employees fairly," he said. “Closing of the parent's plan is the culmination of years of effort by Haynes and Boone and Milbank working closely together as a team to achieve a great result for our client."

Pursuant to the Grupo Mexico plan, AMC has contributed $2.2 billion in cash to ASARCO. Combined with about $1.4 billion in cash on hand and other considerations, creditors will be paid in full.

Sometimes, debt can be overwhelming, and bankruptcy becomes necessary.
Bankruptcy can sometimes be difficult. If you are considering bankruptcy, contact the Houston bankruptcy lawyers of Weston & Associates, PLLC at 713-623-4242

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