Asarco requests four-month exclusivity extension to resolve environmental, asbestos issues

By Reshmi Basu

New York, July 2 - Asarco LLC requested an extension to its exclusive periods to file a plan of reorganization and solicit votes on the plan, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

The company wants to extend its exclusive plan filing period to Dec. 10, 2007 from Aug. 9 and the solicitation period to Feb. 11, 2008 from Oct. 9.

According to the motion, Asarco stated it had complex and lengthy environmental litigation and asbestos claim issues that must be resolved before it can secure new capital or exit financing, determine the size and treatment of an unsecured creditor class or prepare a disclosure statement with meaningful information on what creditors can expect to recover under a reorganization plan.

The company noted it has asbestos claims against it in the several billion dollar range.

In addition, Asarco said it needs time to estimate derivative asbestos and environmental claims as well as toxic tort claims. On top of environmental issues, the company said it also must resolve labor contracts, disputes with equity ownership as well as nearly $490 million in funded bond debt and lease obligations.

"In order to propose a plan of reorganization and exit bankruptcy, Asarco not only needs to determine its liability but also establish the value of assets," the motion states.

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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