Asarco approved to settle most of $3.5 billion environmental claims

By Caroline Salls

Pittsburgh, June 5 - Asarco LLC obtained court approval to enter into five settlement agreements that will resolve the majority of the roughly $3.5 billion of environmental claims filed against the company, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

As part of the global settlements, the company will allow $835.7 million in general unsecured claims and give $275.3 million in cash to federal and state governments to pay its share of environmental liability at 54 sites across the country, making this the largest environmental settlement in history.

According to the motion, the primary components of the settlements include:

• Owned non-operating sites with identified environmental issues will be placed into environmental trusts along with $233.8 million for remediation and closure costs and $27.5 million for trust administration costs;

• A vast majority of the company's previously unresolved state and federal environmental claims will be allowed as roughly $100 million in environmental claims; and

• Environmental claims of the United States and the states of Nebraska and Washington related to residual environmental settlement sites will be allowed as $14 million in administrative claims and about $736 million in unsecured claims.

Asarco said the settling parties include the company and several of its subsidiaries; the United States; the states of Alabama, Arizona, Arkansas, Colorado, Illinois, Indiana, Montana, Nebraska, New Jersey, New Mexico, Ohio, Oklahoma, Texas, Utah and Washington; the New Jersey Department of Environmental Protection and the Montana Environmental Trust Group, LLC.

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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