Grupo Mexico SAB’s Asarco LLC won $82.8 million in a lawsuit against copper producer Sterlite Industries (India) Ltd. over a failed deal to buy Asarco out of bankruptcy, less than the $2.28 billion it was seeking.
U.S. Bankruptcy Judge Richard Schmidt in Corpus Christi, Texas, awarded the damages to Asarco in a ruling yesterday. The copper miner had argued it suffered damages of $2.28 billion from Sterlite’s decision in 2008 to walk away from an agreement to buy the company, according to the decision.
Sterlite, which blamed a drop in copper prices for failing to complete the deal, harmed Asarco by delaying its exit from bankruptcy, Schmidt said. The judge reduced the damages because Grupo Mexico and Sterlite waged a 2009 bidding war for Asarco, which Grupo Mexico won.
“Damages must be reduced to reflect a subsequent mitigating transaction even if such transaction differs structurally from the initial transaction,” Schmidt said. “Here, the mitigation effort started immediately after the alleged breach and continued until the bankruptcy process resulted in the parent being declared the winner.”
Jorge Pulido, head of investor relations for Mexico City-based Grupo Mexico, which owns Tucson, Arizona-based Asarco, declined to comment on the ruling. Schmidt awarded Asarco $132.8 million in damages less a $50 million letter of credit that Asarco was authorized in 2009 to draw down.
Sterlite, based in India, is a unit of Vedanta Resources Plc. A Sterlite spokesman couldn’t immediately be reached for comment after business hours.
The case is Asarco LLC v. Sterlite (USA) Inc., 10-02010, U.S. Bankruptcy Court, Southern District of Texas (Corpus Christi).