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Thursday, September 20, 2007

20070920 Asarco Asks Bankruptcy Court to Dismiss $68 Million Claim Filed by State of Texas

"From EnergyLaw360

By Christine Caulfield ,

Wednesday, Sep 19, 2007 --- Bankrupt copper mining company Asarco LLC has urged a bankruptcy court to quash a $68 million claim by Texas officials for environmental damage to the state's coast, a claim it argues was filed too late.

In an objection lodged with the court on Friday, Asarco said the damage claim filed in July 2006 by the Texas attorney general on behalf of the state's natural resource trustees was barred by the statute of limitations.  The claim, just one of scores against the bankrupt copper producer for environmental damage, relates to the company's Corpus Christi facility, which processed mineral ore in the production of zinc.

The Tucson, Ariz.-based company, which no longer operates the facility, argues the state was aware of the release of toxins from the site more than three years before making a claim to the court.  Claims under the Comprehensive Environmental Response, Compensation and Liability Act, otherwise known as Superfund, have a three-year statute of limitations, and that statute begins to run on discovery of a possible claim, Asarco told Judge Richard Schmidt. [our "discovery" from 7/2006 is now over 1 year old]

“The Trustees had knowledge of the alleged release and losses well before July 14, 2003, three years prior to filing a claim,” the company said.  The state's knowledge was outlined in the attorney general's own proof of claim and expert report, Asarco told the court, both of which contained surveys, notices, memoranda and orders from the state warning the site was releasing dangerous metals into the Corpus Christi harbor and bay.

“It is undisputed that the state possessed knowledge of the alleged loss and its connection the alleged releases of hazardous substances at the site long before 2003,” said Asarco.

Even assuming the court were to rule that the claim was not time-barred, all portions of the state's claim relating to damage that occurred before the December 1980 effected date of Superfund were barred, the company added.  Last month, Judge Schmidt approved a $31 million settlement between Asarco and the federal government over cleanup at its hazardous California Gulch smelter site in Leadville, Colorado.

The settlement resolved a $200 million lawsuit brought by U.S. environment officials and the state of Colorado more than 20 years ago. The site, which encompasses the entire town of Leadville and an 11-mile stretch of the Arkansas River, was added to the U.S. Environmental Protection Agency's national priority list as a hazardous wasteland in 1983.  In approving the settlement, Judge Schmidt ignored the protests of Asarco's parent company, Asarco Inc., which earlier this month asked the court for an order forcing the company to seek its consent before entering into settlements “over the parent's strong protest.”

The company had slammed Asarco's haste in settling the California Gulch claims, saying the debtors had entered into an agreement despite expert analysis showing the claims were highly inflated.

“Alarmingly, the California Gulch settlement may be just the first of many settlement seeking to resolve the environmental claims that are the subject of the ongoing estimation proceeding and that are asserted in the aggregate amount of over $6.77 billion,” said the company, which lost power over Asarco in December 2005, when the court approved a corporate governance stipulation which shook up the board of directors and effectively excluded it from participation in governance matters.

Asarco, which has been active in mining, smelting and refining for over a century, still faces environmental claims at nearly 100 other sites. Those claims have been asserted by the federal government, state governments, Indian tribes and private parties.  The company also faces more than 95,000 asbestos-related personal injury claims, court documents have revealed, with the total value of all claims estimated to be potentially as high as $25 billion.  Asarco filed for Chapter 11 protection on Aug. 9, 2005, listing assets and liabilities in excess of $100 million."

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