Asarco, unsecured creditors committee request emergency approval to appoint chief restructuring officer

By Caroline Salls

Pittsburgh, Nov. 22 - Asarco LLC and its official committee of unsecured creditors requested emergency approval to appoint Douglas McAllister as chief restructuring officer in its Chapter 11 case to assume all rights and responsibilities of the board of directors and chief executive officer, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

According to the filing, throughout a strike that was resolved last week, Asarco's official committee of unsecured creditors has expressed its concern to the company's management and the court regarding sole director Carlos Ruiz Sacristan's "protracted refusal to take steps toward resolving the work stoppage," his simultaneous service on the board of directors of Southern Peru Copper Co., which competes directly with Asarco in the international copper market, and his failure to elect a chief executive officer who has the confidence of Asarco's management and its salaried and hourly workforce to maximize the value of the company's estate.

The filing said the sole director has refused to address the committee's concerns. He also has failed to appoint a new CEO to replace Daniel Tellechea, who resigned more than three weeks ago.

"The committee respectfully submits that Asarco's operating management and hourly employees appear capable of returning Asarco to full operating capacity and maximizing returns for Asarco's estates and its creditors," the motion said.

"However, they are unlikely to succeed in these endeavors if they continue to be hampered by board-level decision making that is designed to benefit parties other than Asarco, and by the lack of an experienced and independent chief executive officer."

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9. Its Chapter 11 case number is 05-21207.

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