Federal Judge Ratifies Superiority of Grupo Mexico’s Reorganization Plan of Its Subsidiary ASARCO
MEXICO CITY-(Business Wire)-September 25, 2009 - GRUPO MÉXICO, S.A.B. DE C.V. (the “Parent”), announced that U.S. Bankruptcy Court Judge Richard Schmidt today issued a Report to the U.S. District Court ratifying his previous recommendation for confirmation of the Reorganization Plan for ASARCO filed by Americas Mining Corporation (AMC), a subsidiary of Grupo México. The Report and Recommendation reinforces Judge Schmidt’s belief that the AMC plan should be confirmed by U.S. District Court Judge Andrew S. Hanen.
In his opinion, Judge Schmidt determined that notwithstanding the post-deadline modifications made by Sterlite to its offer and the accompanying late amendments to the Debtor’s plan made at the direction of the independent members of the ASARCO Board of Directors following the Bankruptcy Court’s rejection of the Debtors’ Plan in its previous Report and Recommendation dated August 31, 2009, “… the Parent’s plan is superior and should be confirmed because it provides higher payment for the assets of the estate …” and “…the treatment of equity under Parent’s Plan is superior.” Judge Schmidt also states that confirmation of the Parent’s Plan should be expected by the end of October.
The resolution from Judge Schmidt also states that the Bankruptcy Code does not provide an unlimited right to modify a plan of reorganization after it has been rejected in favor of a superior plan, as Sterlite and the independent members of the ASARCO Board attempted to do.
Finally, Judge Schmidt concluded: “If the Parent's Plan is closed it will culminate perhaps the most successful major bankruptcy reorganization in history.”
Grupo México is extremely pleased with the resolution from the Corpus Christi Bankruptcy Court and considers it a complete victory for the Parent, ASARCO and its creditors. In addition to recommending confirmation of its Reorganization Plan by the Brownsville District Court in the very near term, the decision will assure the full payment to the ASARCO creditors, payment of the environmental and asbestos claims, a definite exit of Asarco from the Chapter 11 before the end of year, and a full release of the Brownsville judgment.
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