DENVER — Colorado Attorney General John Suthers announced today that the state and federal government will receive more than $42 million as part of a Chapter 11 reorganization plan a judge from the U.S. District Court for the Southern District of Texas has approved for Asarco, Inc. and certain related companies. The order, approved by Judge Andrew S. Hanen, described the Asarco case as “one of the most successful bankruptcy proceedings in recent history” and “perhaps the largest and most complex case in bankruptcy history with respect to claims for environmental liability.” The $22 million the state and federal government will recover along with $20 million earmarked for a custodial trust will be used for environmental remediation at sites throughout the state.
The reorganization plan, filed by Asarco’s parent company, Americas Mining Corporation, provides more than $1.7 billion in funds for environmental remediation of more than 50 sites in 19 states currently and formerly owned or operated by Asarco.
“Asarco’s reorganization is exceptional in that Colorado and the federal government will recover every dollar they claimed for environmental remediation — plus interest,” Suthers said. “These funds will go a long way to improving and remediating sites Asarco operated at throughout the state.”
Asarco filed its bankruptcy case in the Southern District of Texas in 2005. Sixteen states and the federal government participated in litigation and settlement discussions with Asarco throughout 2006 and 2007, culminating in a series of settlement agreements approved by Judge Richard S. Schmidt, of the U.S. Bankruptcy Court for the Southern District of Texas, on June 5, 2009. The environmental settlement fixed the amounts of environmental claims, but funding to satisfy the claims awaited confirmation of the company’s Chapter 11 reorganization. On Aug. 31, 2009, Judge Schmidt recommended that the Americas Mining Corporation plan be confirmed over a competing plan filed by Asarco itself. That plan, confirmed by Judge Hanen, provides for the full payment of environmental claims. Colorado is expected to receive its share of the $1.7 billion on or about Dec. 9.
The settlements includes the funding of an environmental custodial trust, which will undertake environmental remediation of an 89-acre site in Denver, Colorado, in the vicinity of 495 E. 51st St., formerly used for smelting and refining and former mining sites near Silverton. The state will devote $16 million to the remediation of the Denver site and $4 million to the remediation of the Silverton site.
The state and the federal government will devote the balance of the funds they receive under the reorganization to remediation at a series of other sites, including California Gulch Superfund site located in and around Leadville; a 4.5 square-mile site near Vasquez Boulevard and Interstate-70; the Terrible Mine site in Custer County; a site in the Bonanza mining district in Saguache County; and, the Summitville Mine Superfund Site.
Assistant Attorneys General Richard Lotz and James Holden represented Colorado in the Asarco bankruptcy proceedings. Former Senior Assistant Attorney General Vicky Peters also contributed to the case.