Asarco settles Encycle, Nueces Bay environmental claim dispute

By Caroline Salls

Pittsburgh, April 10 - Asarco LLC requested court approval of a $30 million environmental claims settlement with the United States in connection with cleanup efforts related to the company's Encycle site, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

According to the motion, the government alleges that Asarco and its Encycle/Texas, Inc. wholly owned subsidiary responsible for cleanup costs at the Encycle site in Corpus Christi, Texas, as well as damage repair costs at a site near Encycle made up of Nueces Bay, Corpus Christi Bay and the Corpus Christi Inner Harbor.

The United States entered into the settlement agreement on behalf of the Environmental Protection Agency, the State of Texas and the Encycle site trustee.

Under the Encycle settlement, the EPA, the state and the trustee will have a $10 million general unsecured claim against Asarco.

In addition, all of Asarco's obligations to perform cleanup work at the sites were resolved under the settlement.

Under the Nueces Bay settlement, the state will have a $10 million general unsecured claim against Asarco and a $10 million general unsecured claim against Encycle.

Asarco said the Encycle clean-up claims were estimated at $18.9 million, and the Nueces Bay claims were estimated at more than $69 million.

A hearing is scheduled for May 23.

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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