Asarco calls examiner request moot in light of appointment of CEO, board additions

By Caroline Salls

Pittsburgh, Jan. 9 - Asarco LLC objected to a request from the Texas Commission on a call for appointment of an examiner to examine the background and alleged substantial conflicts of interest posed by present sole director Carlos Ruiz Sacristan, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

The Texas Commission on Environmental Quality, the State of New Jersey Department of Environmental Protection and the Missouri Department of Natural Resources called for the examination on Dec. 21, saying the company is unwilling to appoint a truly independent board of directors.

In its objection, the company said Douglas E. McAllister was appointed interim chief executive officer on Dec. 15 and two qualified independent members were added to Asarco's board of directors, rendering the examination request moot.

The company also received court authorization to make changes to its operating agreement.

"Because Asarco now has a functioning CEO and an independent board of directors, the appointment of an examiner to act as a watchdog over the sole director and to serve as chief restructuring officer is unnecessary," the company said in the objection.

The examiner motion had originally requested that the examiner be given the authority to be chief restructuring officer, since the company had no CEO at the time.

The Texas Commission on Environmental Quality also asserted that an independent third-party chief restructuring officer should be appointed, as opposed to elevating the current general counsel, who allegedly lacks operations experience, to the position of chief executive officer.

According to the examination motion, Ruiz engages in conflicting and irreconcilable duties to entities in competition with the company and has a demonstrated bias in favor of the company's ultimate parent company, Grupo Mexico SA de CV.

The states specifically requested that the examiner look into Ruiz's relationships with any of the defendants in the pending litigation challenging the sale of Southern Peru Copper Corp., including Americas Mining Corp. and Grupo Mexico SA de CV.

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

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