Asarco lessors ask court to reject request to end railroad equipment leases

New York, Sept. 29 - Lessors of railroad equipment to Asarco LLC asked the U.S. Bankruptcy Court for the Southern District of Texas to reject the company's request to terminate the leases.

Asarco's claim that it is not using the equipment - tank cars and a switching locomotive - is wrong, according to a court filing Wednesday by U.S. Bank NA, the owner trustee and indenture trustee, and AT&T Capital Holdings International, Inc., the owner participant.

Asarco has been using "almost all" the equipment since filing for Chapter 11 and is likely to do so beyond Sept. 30, U.S. Bank and AT&T Capital said.

Furthermore, if the court does allow the rejection of the leases, Asarco should be required to return the equipment at a mutually convenient location with manuals and records in English and copies of insurance. Asarco should also be instructed to provide reasonable assistance.

U.S. Bank and AT&T Capital said these requirements are necessary because 80 of the rail cars are in Mexico or on their way there and because they believe some have been sub-leased or are being used by affiliates of Asarco.

A hearing is scheduled for Sept. 30.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.