Asarco-Grupo Mexico dispute nearing conclusion? - Southern envuelta en millonaria disputa
Published by MAC on 2008-09-22Asarco seeks billions from Grupo Mexico in dispute
Reuters
3rd September 2008
By Emily Chasan and Mica Rosenberg
NEW YORK/MEXICO CITY - U.S. copper miner Asarco plans to seek around $8 billion in damages from Grupo Mexico after a court ruling found the Mexican miner harmed Asarco's creditors in a 2003 transfer of a Peruvian mining unit, a lawyer for the company said on Wednesday.
In a ruling on Aug. 30, U.S. District Judge Andrew Hanen, found directors at Asarco's parent had breached their fiduciary duty in the transaction and that Grupo Mexico made a "fraudulent transfer" of Asarco's stake in Southern Peru Copper Corp.
But in a complex ruling, Hanen also said Grupo Mexico had not acted with malice and threw out punitive damages Asarco was seeking in the case. "We're asking that they disgorge or give back the stocks and the dividends," said Irv Terrell, a lawyer at Baker Botts who represents Asarco in the case.
Hanen, who sits in U.S. District Court in Brownsville, Texas, has asked for a briefing on damages by Sept. 15 and expects to rule shortly thereafter.
Southern Peru Copper Corp is now Southern Copper, a profitable unit of Grupo Mexico with a market value of more than $6 billion. Terrell said additional damages were worth close to $2 billion. Lawyers for Asarco had argued in the case that Grupo Mexico schemed to strip Asarco of one of its most valuable assets, pushing the company toward insolvency.
Asarco, which owns three copper mines in Arizona, filed for Chapter 11 bankruptcy protection in 2005 after it was sued for $1 billion over environmental clean-up and asbestos claims. Its total asbestos and environmental liabilities are estimated to be at least $3 billion.
DIFFERING VIEWS
But Grupo Mexico took a different tack on damages, saying what the company could end up paying is "far away" from the billions of dollars Asarco seeks, Alberto de la Parra, the Mexican miners' General Counsel said in an investor conference call on Wednesday.
"The worst case scenario will be in the range of $50 million to a couple $100 million, but not more than that," said De la Parra.
But analysts said the low end of Grupo Mexico's estimate is unlikely.
"We believe that $83 million would be the floor that the company would have to pay," said Dahlman Rose & Company in a research note.
"We cannot rule out the possibility that the judge would rule that Grupo Mexico would have to pay as much as $6.6 billion, as that would be the approximate present day value of the shares," said the note.
The analysts said they could not recommend shares in Southern Copper, Grupo Mexico's Peruvian unit, given the uncertainty of the court case and the possibility of a massive payout.
Grupo Mexico is in a separate legal battle to win back control over Asarco, which is run by an independent board due to the bankruptcy and is trying to stop Sterlite Industries Ltd's $2.6 billion bid for the U.S. miner.
Sterlite Industries, an Indian unit of London-listed Vedanta Resources Plc, was the highest bidder in an auction for Asarco's assets in May and has said it would buy the operating assets of Asarco in an all-cash deal.
(Reporting by Emily Chasan and Mica Rosenberg; Editing by Andre Grenon)
Asarco wins ruling vs. Grupo Mexico
By Max Jarman
The Arizona Republic
5th September 2008
The U.S. District Court in Brownsville, Texas, has upped the stakes in the battle for control of bankrupt Tucson copper miner Asarco LLC.
The court ruled Saturday that Asarco's nominal owner, Grupo Mexico SAB, defrauded the company's creditors when it stripped away its most valuable asset: a 54 percent stake in Peru's largest copper mine. The decision by Judge Andrew Hanen could set the stage for Mexican conglomerate Grupo being forced to return the Southern Peru Mining Co. stock and accrued dividends, now valued at more than $8 billion.
When companies enter a period of insolvency when bankruptcy is likely, they are prohibited from engaging in transactions that could harm creditors. Such transactions can be nullified by the court.
The judge concluded Asarco was in that state in 2003 when Grupo forced it to sell the Southern Peru stock to subsidiary Americas Mining Corp.
Irv Terrell, a Houston lawyer who represented Asarco in the proceedings, called the decision a victory for the company, which sued Grupo and Americas Mining to regain the stock.
"I am delighted. It's on to the damages," Terrell said.
The judge is expected to set damages at a hearing later this month.
Grupo Mexico said in a statement that it will appeal the decision.
Grupo paid $1 billion, plus assumed debt, for Asarco in 1999 and sought Chapter 11 protection for the company in 2005 after a period of low copper prices, mounting environmental liabilities and labor unrest.
Grupo was stripped of day-to-day control of the company after the filing, and a three-member committee was appointed to run Asarco.
Grupo has since been fighting to regain control of the company.
Since the bankruptcy filing, copper prices have soared and Asarco's three Arizona mines and copper smelter have increased significantly in value. Asarco has about 2,600 employees, mostly in Arizona.
Asarco's current management has submitted a Chapter 11 reorganization plan that includes the sale of the company's operating assets to India's Sterlite Industries Ltd for $2.6 billion. Proceeds would be used to pay off creditors and settle $2.4 billion in environmental and asbestos-related personal-injury claims.
But the court also permitted Grupo to submit a plan. Its proposal calls for the repayment of all Asarco's debts with a $2.7 billion payment and $440 million in guarantees.
Although Asarco's plan calls for the settlement of the environmental and asbestos claims, Grupo would continue to litigate them to determine actual damages.
If Grupo can regain control of Asarco and is ordered to pay damages to the company, it will essentially be paying them to itself. If Sterlite gains the company, the damages will go into a fund to be distributed to Asarco creditors.
Grupo spokesman Tom Johnson said the company remains committed to regaining control of Asarco.
Southern envuelta en millonaria disputa
Grupo México habría retirado participación de Asarco de mina peruana. El juez dictaría sentencia definitiva el 15 de setiembre. Se espera un pago de US$ 8 mil millones.
5 de Septiembre 2008
Southern Perú está envuelta en una millonaria disputa. Un juez estadounidense (30 de agosto) dictaminó que los directivos de Grupo México -casa matriz de la minera de cobre Asarco- violaron deberes fiduciarios e incurrieron en una "transferencia fraudulenta" al retirar en el 2003 una participación de Asarco en Southern Peru Copper Corp. a otra empresa controlada por la compañía mexicana.
Los demandantes aseguran que el Grupo México transfirió hace cuatro años la participación del 54.2% que Asarco tenía en Southern Peru Copper Corp -empresa que cotiza en la bolsa de Nueva York- a otra división del conglomerado minero mexicano, subvalorando los activos en casi US$500 millones.
En esa línea, la mina de cobre buscará una reparación de daños por US$ 8,000 millones del Grupo México. Según la agencia Reuters, en lo que fue un complejo fallo, el juez Andrew Hanen también dictaminó "que Grupo México no actuó con malicia y desechó otros daños punitivos que argumentaba Asarco.
El abogado de Baker Botts, Irv Terrell, quien representa a Asarco, dijo que los daños adicionales podrían ser cercanos a los US$2,000 millones. "Estamos solicitando que desembolsen o devuelvan las acciones y los dividendos", indicó.
Grupo México dijo que la suma que Asarco pretende está más allá de la realidad y que podrían terminar pagando mucho menos. "En el peor de los casos será un rango de entre US$ 50 millones o un par de 100 millones", dijo Alberto de la Parra, consejero del Grupo México
Se espera que el juez dé más detalles el 15 de setiembre y luego emita la sentencia.
Asarco quiere miles de millones por disputa con Grupo México
3 de septiembre de 2008
Por Emily Chasan y Mica Rosenberg
NUEVA YORK/MEXICO DF (Reuters) - La minera de cobre estadounidense Asarco buscará una reparación de daños por unos 8,000 millones de dólares de Grupo México, después de que un juez dijo que la firma mexicana perjudicó a acreedores al transferir en el 2003 una participación en una mina peruana.
En un dictamen fechado el 30 de agosto, un juez en Estados Unidos dijo que directivos de Grupo México -la casa matriz de Asarco- violaron deberes fiduciarios e incurrieron en una "transferencia fraudulenta" al retirar de Asarco una participación en Southern Peru Copper Corp.
Pero en lo que fue un complejo fallo, el juez Andrew Hanen también dijo que Grupo México no actuó con malicia y desechó otros daños punitivos que argumentaba Asarco.
"Estamos solicitando que desembolsen o devuelvan las acciones y los dividendos," dijo el abogado de Baker Botts, Irv Terrell, quien representa a Asarco en el caso.
Se espera que el juez, con sede en Brownsville, dé más detalles el 15 de septiembre y después emita la sentencia.
En el 2005, la mina peruana cambió su nombre a Southern Copper Corp y actualmente es una de las unidades más rentables de Grupo México, con un valor de mercado de más de 6,000 millones de dólares.
Terrell dijo que los daños adicionales podrían ser cercanos a los 2,000 millones de dólares.
Los abogados de Asarco han argumentado que Grupo México planeó quitarle a Asarco uno de sus activos más valiosos, lo que empujó a la minera a pedir protección por bancarrota.
Asarco, que posee tres minas de cobre en Arizona, solicitó la protección de bancarrota del Capítulo 11 en el 2005, después de que fue demandada por 1,000 millones de dólares por razones ambientales.
Los reclamos sobre daños al medio ambiente se estiman al menos en 3,000 millones de dólares.
Grupo México dijo que la suma que Asarco pretende está más allá de la realidad y que podrían terminar pagando mucho menos.
"En el peor de los casos será un rango de entre 50 millones de dólares o un par de 100 millones de dólares, pero no más que eso," dijo Alberto de la Parra, consejero de Grupo México, en una conferencia telefónica el miércoles.
Los analistas creen que la suma mínima sería de 83 millones de dólares.
Grupo México tiene otra disputa legal, con la que busca recuperar el control de Asarco, que es administrada por un consejo independiente debido a la bancarrota.
(Traducido por Luis Rojas Mena. Editado por Mario Naranjo)