Grupo Mexico SAB’s U.S. mining unit must pay $122.4 million in fees and $6.5 million in expenses to the Houston law firm the Mexican copper producer spent six years fighting in federal courts in Texas.
U.S. Bankruptcy Judge Richard S. Schmidt in Corpus Christi, Texas, yesterday ordered Asarco LLC to pay the fees and expenses of Baker Botts LLP, which won a judgment potentially worth more than $6 billion against Grupo Mexico in 2008 related to Asarco’s bankruptcy. The case was settled when Grupo Mexico agreed to pay creditors about $2.5 billion to bring Asarco out of bankruptcy.
“The results obtained in these cases are nothing short of extraordinary,” Schmidt wrote, explaining why he thought the fees were justified.
The judge credited Baker Botts with winning billions of dollars for Asarco’s creditors, who included victims of asbestos poisoning and governmental agencies responsible for cleaning up mining pollution.
“Baker Botts performed at an exemplary level,” Schmidt wrote in an opinion issued last month. The payment order was issued yesterday.
Group Mexico, acting through a U.S. holding company, put Asarco into bankruptcy in 2005 seeking protection from creditors owed billions of dollars. At the start of the bankruptcy, Asarco, a copper miner based in Tucson, Arizona, was in danger of being forced to liquidate, Schmidt wrote.
Grupo Mexico Suit
After the judge installed independent directors to run Asarco, Baker Botts sued Grupo Mexico, accusing the Mexican mining company of causing Asarco’s bankruptcy by stripping its subsidiary of its most valuable assets and then abandoning it.
The victory over Grupo Mexico “is likely the largest fraudulent transfer judgment in Chapter 11 history,” Schmidt wrote. Chapter 11 refers to the section of the U.S. Bankruptcy Code companies use to reorganize.
G. Irvin Terrell was Baker Botts’s lead attorney in the fraudulent-transfer suit. Jack L. Kinzie was the lead lawyer in the bankruptcy case before Grupo Mexico regained control of Asarco and hired a new law firm.
Asarco objected to the fees. The company’s new attorney, Marty L. Brimmage Jr. of the law firm Haynes & Boone LLP., didn’t immediately reply to an e-mail requesting comment on the fee decision.
The case is In re Asarco LLC, 05-21207, U.S. Bankruptcy Court, Southern District of Texas (Corpus Christi).