In 1887, ASARCO's lead smelter opened in El Paso. Over the next century, the plant produced lead, copper, and sulfuric acid, amongst other materials. The smelter also produced hundreds of tons of air pollutants, contaminating parts of El Paso and Juárez with lead and arsenic. A total of over one thousand residential properties were tested by the Environmental Protection Agency (EPA) and identified as having significantly elevated lead and arsenic contamination. As a result, these properties are being "remediated," a process which involves the removal of the contaminated soil and its replacement with clean soil.

Current cleanup status
The cleanup in El Paso is continuing. The EPA is overseeing the cleanup of residential properties being conducted by ASARCO. ENTACT Environmental Services are the contractors doing the work, and the excavated soil is being taken to the McCombs landfill in El Paso. The ASARCO/ENTACT team is projecting that they will be able to clean up approximately 180 residential properties with the $2,000,000 allocated for cleanup in 2005 from the ASARCO trust fund. The ASARCO trust fund was negotiated in 2003 between ASARCO and the Department of Justice. It was initially funded with $100 million to pay for cleanup of environmental contamination at sites for which ASARCO is responsible.

The cleanup plan that ASARCO is operating under was previously submitted to the EPA and approved. The screening levels being used for lead is 500 parts per million and for arsenic is 46 parts per million. These are the same levels that were used during previous cleanups done by the EPA.

In this cleanup session, as of October 4, 2005, 97 residential properties had been excavated, 60 properties had been fully restored to pre-excavation conditions, 16 properties are waiting to be restored, and 21 properties are waiting for laboratory confirmation results.

The EPA states that there will be approximately 405 residential properties remaining to be cleaned after the present cleanup is completed in December 2005. They also state that there are approximately 600 properties that have not been tested.

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Current onsite cleanup status
In addition to residential properties surrounding the ASARCO lead smelter, the ASARCO property itself has been severely polluted over the past century. Therefore, this "onsite" property must be cleaned as well. Recent estimates suggest that the cost of onsite cleanup will be in the range of $13-16 million. The Texas Commission on Environmental Quality (TCEQ) is in the process of completing an ongoing 5-year cleanup plan.

ASARCO'S bankruptcy
On August 9, 2005, ASARCO declared bankruptcy. The effect the bankruptcy will have on the trust fund has yet to be fully determined. The trust fund is not a current asset in any of the present ASARCO bankruptcy estates. Therefore, the trust fund is not immediately impacted by the bankruptcy. That, however, might change.

Many expect ASARCO's creditors to attempt to bring the trust fund into the estate. If this happens, the trustee, the person appointed to manage the trust, will likely freeze the assets of the trust in order to avoid any potential personal liability. After the trust is frozen, the assets will no longer be accessible for cleanup funding and will remain inaccessible until the matter is resolved in court.

Bar date
When a company files bankruptcy, the bankruptcy court sets a date, called a "bar date," after which it is too late for anyone to file a claim to seek to become a creditor. A general bar date, which is not applicable to governmental units, has been set for Tuesday, December 13, 2005. This bar date applies to El Paso property owners. If property owners fail to file a proof of claim with the bankruptcy court, they are not entitled to share in any distribution from the bankruptcy estate of ASARCO. If they file an untimely proof of claim, they are likely to be subordinated below timely filed proofs of claim, which likely means that an untimely claimant would receive no money from ASARCO.

ASARCO and the City of El Paso recently reached an agreement that would 1) withdraw the December 13 bar date, and 2) require ASARCO to give notice to individuals that could potentially have claims against ASARCO. The judge will rule on whether he approves the agreement on Friday, October 28. If the agreement is approved, El Paso property owners will not be forced to file a claim with the bankruptcy court by December 13, 2005. Instead, a later bar date will be set by the court.

The bar date for governmental units has not been set. The minimum time between filing bankruptcy and the bar date for governmental units is 180 days. ASARCO's voluntary petition was filed on August 9, 2005, and 180 days from this date is February 4, 2006. This bar date, however, will not apply to El Paso residents.