Grupo Mexico accuses Asarco of ignoring its reorganization plan

New York, May 21 - Grupo Mexico SAB de CV accused Asarco LLC of refusing to take its plan or reorganization seriously even though Grupo Mexico has guaranteed that all of Asarco's creditors will be paid in full or left unimpaired.

Although Grupo Mexico said it submitted the plan to Asarco's independent board last month, it said it has "repeatedly been denied the additional information needed to refine its proposal and ensure that it fully values Asarco's assets and liabilities."

Grupo Mexico added that it "believes that the refusal to provide information is further evidence that Asarco's independent board and its financial advisor, Lehman Brothers, have no intention of taking Grupo Mexico's plan seriously."

Among the pieces of information Grupo Mexico said it has requested but not received are: details on the anticipated amount of allowed claims related to the company's environmental liabilities; information about other bids for the company's assets that Lehman Brothers said have been received; and details about how the auction process will proceed.

It described Asarco's proposed method of settling environmental and asbestos claims as "questionable."

"Instead of determining or estimating the amount of environmental and asbestos claims prior to any sale, the sale process being conducted by Asarco seems to be an attempt to determine the amount of the claims based on the highest bid," Grupo Mexico said. "The higher the bid, the higher the claims.

"Grupo Mexico believes the claims should be determined on their own merit rather than allowing claims to be inflated by today's high commodity price for copper."

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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