Asarco creditors committee gets court OK to prosecute claims against company's officers and directors

By Reshmi Basu

New York, Aug. 8 - Asarco LLC's official committee of unsecured creditors received court approval to file potential breach of fiduciary duties against some of the company's officers and directors from the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, following Grupo de Mexico SA de CV's leveraged buyout of Asarco, the officers and directors of Grupo de Mexico began selling Asarco's key assets to pay off acquisition debt.

The committee said it has potential claims in connection with the monetization of Asarco's insurance policies for much less than the policies were worth, as well as claims for selling development properties with confirmed ore bodies for raw land prices.

The committee said the officers and directors also continually sold vital mining equipment that they knew would be difficult or impossible to replace.

The creditors committee also alleged that the officers and directors sought only to strip as much value as possible out of the company for the benefit of Grupo de Mexico and AMC.

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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