Asarco parents tweak plan to increase contribution, eliminate cap

By Caroline Salls

Pittsburgh, June 2 - Asarco LLC parents Asarco Inc. and America's Mining Corp. filed an amended plan of reorganization Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas that increases the parents' plan contribution and removes a 75% recovery cap on bondholder, general unsecured and environmental unsecured claims.

Specifically, the parents' contribution will be increased to $1.3031 billion from $1.3 billion.

In addition, holders of bondholder, general unsecured and environmental unsecured claims will receive a share of available plan funds, plus a share of 50% of the net proceeds of a litigation trust to be funded with the company's claims against Sterlite.

The remaining 50% of the net litigation trust proceeds will go to reorganized Asarco as working capital for the eventual benefit of reinstated creditors.

Under the previous plan, the bondholder and unsecured creditors were slated to be paid no more than 75% of their claims in cash.

The parent companies have also added a convenience claims class to the amended plan. These creditors will be paid in full.

Also, holders of late filed and subordinated claims will now share in any remaining plan cash and litigation trust interests after other claims have been paid in full, as opposed to receiving no distribution.

Creditor treatment

Treatment of creditors will include:

• Holders of administrative, priority tax and priority claims will recover 100% in cash;

• Holders of secured claims will recover 100% either in cash, through the return of the collateral securing the claim or through reinstatement of the claim;

• Bondholders holding $439.8 million of claims will recover a share of available plan funds and 50% of net litigation trust proceeds;

• Holders of $1 billion of asbestos personal injury claims will recover 75% through a section 524 (g) trust that will be funded with $500 million in cash, a secured one-year note in principal of $250 million and $27.5 million of additional cash;

• Holders of $264.6 million to $381.8 million of general unsecured claims and holders of up to $1.4 billion of environmental unsecured claims will recover a share of available plan cash and a share of 50% of net litigation trust proceeds;

• Holders of up to $261.3 million of environmental trust claims will have their claims reinstated, assumed by the environmental liquidation trust and administered with the environmental liquidation trust agreement.

• Holders of reinstated environmental claims will have their claims reinstated to be assumed and paid by the applicable reorganized debtor;

• Holders of late-filed claims subordinated claims and will receive any remaining available cash and litigation trust interests; and

• Interests in Asarco will be cancelled.

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9, 2005. 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.