Asarco to receive $10.75 million payment under smelter roof collapse claim settlement

By Caroline Salls

Pittsburgh, Aug. 15 - Asarco LLC requested court approval of a roof damage repair claim settlement agreement with Liberty Mutual Fire Insurance Co., according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

According to the motion, the roof at Asarco's Hayden Smelter smeltering and converter building collapsed, causing severe damage to the building and delaying productivity at the site. The Smelter roof was insured by Liberty Mutual.

Following the roof collapse, Asarco filed a claim with Liberty Mutual for damages, including costs and repairs to the building's structure and business interruption losses.

The company said the policy deductible was $5 million.

Unable to agree on a damages calculation, Asarco said it entered into negotiations with the insurer, and, pending the negotiation of a settlement, Liberty Mutual advanced a $5 million pre-settlement payment in September 2007.

Under the settlement, the total loss attributable to the roof collapse was determined to be $20.75 million, which includes $7.4 million for repairs to the roof and structure of the building and $13.35 million for business interruption losses.

As a result, Liberty will make a $10.75 million net compensation payment to Asarco, which represents the settlement amount, minus the $5 million deductible and the $5 million advance payment.

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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