Asarco asks court to limit powers of subsidiary to enter into agreements

By Reshmi Basu

New York, Nov. 7 - Asarco Inc. asked the court to limit the power of its subsidiary Asarco LLC to enter into certain agreements, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

In August, Asarco Inc. originally filed the request, in which it requested that the court require Asarco LLC to obtain its consent prior to entering into a settlement or compromise over certain claims.

The hearing for that motion had been scheduled for September but was adjourned a number of times because both parties were in discussions, Asarco Inc. said in the motion.

Meanwhile in late October, both parties were ordered by the court to enter into mediation to hammer out a resolution regarding the asbestos-related liability claims.

Asarco Inc. contended that the subsidiary was uncooperative and would not even reveal claim estimations.

The parent company said it also delivered a letter to its subsidiary, in which it offered to provide a $300 million backstop for a plan of reorganization.

Asarco LLC refused to respond to the offer and continues to remain uncooperative, the parent said in the court document.

Therefore, the company has asked the court to intervene and asked for a hearing date of Nov. 16 or Nov. 19 to try the motion.

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9, 2005. Its Chapter 11 case number is 05-21207.

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