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ASARCO Wins Liability Phase of Fraudulent Transfer Trial Against Grupo Mexico

HOUSTON, September 2, 2008 -- On August 30, 2008, U.S. District Judge Andrew Hanen of Brownsville, Texas published an opinion holding that Americas Mining Corporation (a Grupo Mexico subsidiary) had perpetrated a fraudulent transfer to itself of ASARCO’s controlling interest in Southern Peru Copper Corporation by intending to hinder and delay creditors in making the transfer.

In his opinion, Hanen also stated that in making the transfer Americas Mining had aided and abetted and conspired in the breach of the fiduciary duties of ASARCO’s directors owed to ASARCO’s creditors.

Hanen requested briefing on an appropriate remedy by September 15 and promised an expeditious ruling.

“We are delighted with Judge Hanen’s opinion,” said Irv Terrell, a partner with Baker Botts and lead outside counsel representing ASARCO. “We now have the opportunity to recover substantial value for Asarco and its creditors.”

ASARCO is seeking disgorgement of the Southern Peru interest and the dividends paid on that interest, totaling more than $8 billion. Grupo Mexico and Americas Mining contend that nothing is owed because all of ASARCO’s creditors will be paid in full under a Grupo Mexico plan of reorganization yet to be decided by the bankruptcy court.

ASARCO says that Grupo’s plan should not be confirmed by the Corpus Christi bankruptcy judge, that Grupo’s characterization of its plan is misleading, and ASARCO’s plan should instead be confirmed.

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