Wednesday, April 15, 2009

Justice for Asarco?

"A US court ordered a unit of Mexican mining conglomerate Grupo Mexico SAB [GMSA] to return 30% of the shares of Southern Copper Corp. [SCC] to US copper miner Asarco LLC, in the latest chapter in their legal dispute. US District Court Judge Andrew Hanan in Brownsville, Texas, gave Asarco and [GMSA] until April 15 to present their calculations concerning the value of the award. Besides the [SCC] shares, worth about $4.88 billion in trading last Thursday, Judge Hanen awarded Asarco dividends [GMSA] paid on six years' worth of [SCC] earnings, plus interest. the plaintiffs estimate the award will exceed $6 billion. ... The lead attorney for the Mexican company, at New York's Milbank, Tweed, Hadley & McCloy, didn't return a request for comment, but [GMSA] said it will appeal the judgment to the Fifth US Circuit Court of Appeals. ... Judge Hanen found [GMSA] may have paid a fair amount for Asarco's stake in [SCC] when it sold the holding from Asarco to [GMSA's] AMC unit. However, he ruled that the Mexican company acted to structure the transfer 'knowing that the transaction as contemplated would constitute a transfer in fraud of Asarco's creditors'," Joel Millman at the WSJ, 3 April 2009.

How right Judge Hanen is. See my last Asarco post, 15 September 2008: http://skepticaltexascpa.blogspot.com/2008/09/asarco-followup-5.html. As for Milbank, I think the Fifth Circuit should tell these New York carpetbaggers go back where they came from for filing a frivolous appeal. Then double the award!

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