ASARCO parent pays $1.79 billion in environmental bankruptcy
The Environmental Protection Agency (EPA), other federal
agencies and states will receive over $1.79 billion to
address contamination at over 80 sites through resolution
of the American Smelting and Refining Company (ASARCO)
For EPA, which is receiving approximately $1 billion
for future cleanup of Superfund sites, it is the largest
bankruptcy settlement ever. The amount represents full
payment of EPA’s claims, plus interest. Funds are being
distributed pursuant to settlement agreements approved
in 2007, 2008 and as most recently as June of 2009.
The cost recovery settlement for the Omaha Lead site
in Nebraska provides payment of $130.4 million for past
costs incurred by the agency, the largest amount achieved
by the Superfund enforcement program for a single site.
Five settlement agreements were approved by the Bankruptcy
Court in June 2009, but the Bankruptcy and District Courts
had to approve ASARCO’s Plan of Reorganization before
funds from all the settlement agreements could be distributed.
ASARCO was originally organized in 1899 and has operated
for over 100 years, first as a holding company for diverse
smelting, refining and mining operations throughout the
United States and now as a Tucson-based integrated copper
mining, smelting and refining company.
ASARCO is a subsidiary of ASARCO Inc., itself a subsidiary
of Americas Mining Corporation, which is owned by Grupo
On August 9, 2005, ASARCO filed for reorganization
under Chapter 11 of the Bankruptcy Code in the
United States Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division.
On August 1, 2006, the United States filed a bankruptcy
proof of claim on behalf of EPA with the United States
Bankruptcy Court for the Southern District of Texas,
Corpus Christi Division in the ASARCO Chapter 11
In March 2008, the Bankruptcy Court approved the
process by which ASARCO would pursue the selection
of a plan sponsor and sale of its operating assets.
After a bidding process for the purchase of ASARCO’s
assets, Sterlite (USA), Inc. on May 30, 2008, executed
a purchase and sales agreement in the amount of $2.6
billion for ASARCO’s assets. After the purchase and
sales agreement was executed, copper prices began
to decline, and on October 14, 2008, Sterlite representatives
informed the United States Bankruptcy Court that
the company could not honor the contract.
The Debtor and Sterlite, were able to execute another
purchase and sales agreement in March 2009.
On June 5, 2009, the Bankruptcy Court approved five
settlement agreements which provided recovery on
environmental claims at numerous Superfund sites
throughout the country. See section on settlement
On November 13, 2009, the District Court for the
Southern District of Texas, Corpus Christi Division
accepted the Bankruptcy Court’s Recommendation
to confirm the Parent Plan.