Harbinger looks to abate proposed plan of reorganization for Asarco

By Jennifer Lanning Drey

Portland, Ore., Aug. 3 - Asarco LLC creditor Harbinger Capital Partners Master Fund I Ltd. asked the U.S. Bankruptcy Court for the Southern District of Texas to abate its proposed plan of reorganization for Asarco, according to a Monday filing.

Harbinger said when it originally filed its competing plan of reorganization, it believed the plans of reorganization proposed by Asarco and its parent, Americas Mining Corp., were deficient in a number of material respects.

Harbinger said it proposed its plan in an effort to file a plan that, if confirmed, would provide appropriate recoveries to Asarco's creditors.

However, Asarco and its parent have both made several modifications to their plans since the original filings, which Harbinger believes were made in reaction to its proposed plan.

As a result, proposed treatment for unsecured creditors under both plans has significantly improved, Harbinger said.

Additionally, Harbinger said several parties have objected to confirmation of its plan, creating additional litigation obligations.

To avoid such burdens, Harbinger said it is now recommending bondholders vote in favor of Asarco's plan.

Harbinger noted that it is not withdrawing its plan, because it remains possible that neither Asarco's nor its parent's plan will be confirmed.

In that event, Harbinger believes its plan could still be presented for confirmation.

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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