Harbinger gets court OK to abate plan of reorganization for Asarco

By Caroline Salls

Pittsburgh, Aug. 4 - Asarco LLC creditor Harbinger Capital Partners Master Fund I Ltd.'s motion to abate its proposed plan of reorganization for Asarco was approved Tuesday by the U.S. Bankruptcy Court for the Southern District of Texas.

Harbinger said that 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.

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 these 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 said it 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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