Asarco parent's examiner appointment motion approved, but no duties assigned

By Caroline Salls

Pittsburgh, March 4 - Asarco LLC parent Asarco Inc.'s request for appointment of an examiner for the subsidiary's Chapter 11 case was approved Tuesday by the U.S. Bankruptcy Court for the Southern District of Texas, but the examiner has no current duties.

According to the order, any party has the right to ask the court to assign specific duties to the examiner, but Asarco Inc.'s proposed investigation issues were denied.

The parent company asked the court to order the examiner appointment in January.

Asarco Inc. said the examiner's duties should include a valuation of Asarco LLC; an investigation of the good faith of asbestos claim settlements; and an investigation into whether Asarco has been properly fulfilling its fiduciary duties to the parent.

As previously reported, Asarco Inc. asserted that it has been denied access to information and that it offered to support a stand-alone plan that would pay creditors in full as well as deliver $300 million in financing from a third party to backstop the plan.

Both Asarco LLC and its unsecured creditors group objected to the motion for the appointment of an examiner.

Asarco LLC called it the parent's "latest desperate attempt to undermine and delay Asarco's progress toward plan confirmation and emergence from bankruptcy."

It asserts that its parent has tried on four earlier occasions to gain control of decision-making authority. And with this latest motion, the parent presents no compelling argument as to why it should be permitted to gain a foothold: an independent board is in charge of Asarco's affairs and "a plan is being drafted, settlement negotiations continue, and the confirmation process is to begin in a matter of months."

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

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