Asarco plan funding deal falls apart; status conference set for Nov. 4

By Caroline Salls

Pittsburgh, Oct. 17 - Asarco LLC said its plan of reorganization sponsor does not intend to close on its plan funding transaction, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

As a result, the bankruptcy court has suspended all deadlines for objecting to plan confirmation and for confirmation discovery until further order.

Mediation sessions will be held Oct. 30 and Oct. 31, and the court has scheduled a status conference for Nov. 4.

As previously reported, disclosure statements related to competing plans of reorganization filed by Asarco LLC and parent company Asarco Inc. were approved on Sept. 23, with plan confirmation hearings set to begin on Nov. 17.

Asarco LLC's plan implemented the previously announced $2.6 billion sale of its operating assets to Sterlite (USA), Inc., a subsidiary of Sterlite Industries (India) Ltd. and Vendanta Resources plc.

According to the disclosure statement, the majority of the proceeds from the sale, together with distributable cash and subsequent distributions, were to be paid to creditors under the plan.

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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