Asarco trial comes to an end

The ASARCO trial is almost over, and an enormous number of environmental and asbestos-related lawsuit claims could depend on its outcome. Closing arguments will be given on Thursday June 12, for the case in which Arizona-based mining company ASARCO alleges that its parent company, Grupo Mexico, systematically stripped its assets and left behind little more than a shell. Grupo Mexico is a mining conglomerate headed by Chairman and Chief Executive German Larrea Mota-Velasco. The company is the world’s third largest producer of copper, and has mining interests in several South American locations. ASARCO filed for bankruptcy in 2005, and during the process a bankruptcy judge removed Grupo Mexico’s control over the company due to allegations that the parent company was stripping ASARCO’s assets in an attempt to protect those assets from asbestos and environmental liability claims. Among ASARCO’s claims are that Grupo Mexico knew it faced potential liabilities of more than $1 billion when it acquired the ASARCO company in 1999, and also that the parent company knew it might also shoulder the responsibility of cleaning up to twenty Superfund sites. In addition, ASARCO claims that Grupo Mexico stripped the subsidiary of assets, including Peruvian copper mines that ASARCO once had a significant stake in and were the company’s most significant asset. ASARCO claims the parent company did this to prevent the mines being used to pay ASARCO’s creditors. ASARCO also claims that Grupo Mexico used the fact that it controlled all the parties in the transaction to its own advantage, because it allowed the parent company to underpay ASARCO for the mines. ASARCO’s legal battle began Monday May 12, with the beginning of a multi-billion dollar civil lawsuit against Grupo Mexico. Among those who testified at the trial was German Larrea Mota-Velasco, who repeatedly denied wanting the Andes copper mines in question, and who stated that he had never intended ASARCO should be forced into bankruptcy. The outcome of this civil case will likely determine whether or not many of ASARCO’s creditorsâ€"including contaminated sites in many western states, as well as bond creditors and former employees and others suffering from asbestos-related diseases that the company is liable forâ€"will see any money when the company emerges from bankruptcy. Some estimates say that ASARCO is responsible for tens of billions of dollars worth of liability, including several billion dollars worth of claims relating to exposure to toxins such as asbestos and lead. (Source: Asbestos and Mesothelioma News)