IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS, CORPUS CHRISTI DIVISION Inre: § Case No. 05-21207 § ASARCO LLC, etal. § Chapter 11 § Debtors. § Gointly Administered) 8 MOTION FOR ORDER AUTHORIZING DEBTOR TO REJECT TAX SHARING AGREEMENT WITH AMERICAS MINING CORPORATION AND ASARCO INCORPORATED, A DELAWARE CORPORATION THIS MOTION SEEKS AN ORDER THAT MAY ADVERSELY AFFECT YOU. IF YOU OPPOSE THE MOTION, YOU SHOULD IMMEDIATELY CONTACT THE MOVING PARTY TO RESOLVE THE DISPUTE. IF YOU AND THE MOVING PARTY CANNOT AGREE, YOU MUST FILE A RESPONSE AND SEND A COPY TO THE MOVING PARTY. YOU MUST FILE AND SERVE YOUR RESPONSE WITHIN 20 DAYS OF THE DATE THIS. WAS SERVED ON YOU. YOUR RESPONSE MUST STATE WHY THE MOTION SHOULD NOT BE GRANTED. IF YOU DO NOT FILE A TIMELY RESPONSE, THE RELIEF MAY BE GRANTED WITHOUT FURTHER NOTICE TO YOU, IF YOU OPPOSE THE MOTION AND HAVE NOT REACHED AN AGREEMENT, YOU MUST ATTEND THE HEARING. UNLESS THE PARTIES AGREE OTHERWISE, THE COURT MAY CONSIDER EVIDENCE AT THE HEARING AND MAY DECIDE THE MOTION AT THE HEARING. REPRESENTED PARTIES SHOULD ACT THROUGH THEIR ATTORNEY. ‘TO THE HONORABLE RICHARD S. SCHMIDT, UNITED STATES BANKRUPTCY JUDGE: ASARCO LLC (“ASARCO” or the “Debtor”) respectfully files this Motion for Order Authorizing ASARCO LLC to Reject Tax Sharing Agreement with Americas Mining Corporation and ASARCO Incorporated, a Delaware Corporation (the “Motion”), pursuant to I1US.C. § 365(a). JURISDICTION, VENUE, AND PROCEDURAL BACKGROUND 1, This Court has jurisdiction over this Motion pursuant to 28 U.S.C. § 1334. The Court’s consideration of this Motion is a core proceeding under 28 U.S.C. § 157(b). DALO2477361.7 aOn August 9, 2005 (“Petition Date”), ASARCO filed its voluntary petition for relief under chapter 11 of title 11 of the United States Code (“Bankruptcy Code”) in this Court. On April 11, 2005, several of ASARCO’s wholly owned direct or indirect subsidiaries (collectively “Subsidiary Debtors”)' filed their voluntary petitions for relief under the Bankruptcy Code in this Court (collectively, the “Subsidiary Cases”). Since that time, several of ASARCO's other wholly owned, direct or indirect subsidiaries filed similar petitions for relief in this Court (collectively with ASARCO and the Subsidiary Debtors, “Debtors”). Debtors’ cases are collectively referred to as the “Reorganization Cases.” 3. Debtors remain in possession of their property and are operating their businesses as debtors in possession, pursuant to §§ 1107 and 1108 of the Bankruptey Code. On April 27, 2005, the United States Trustee appointed an official committee of unsecured creditors in the Subsidiary Cases (the “Subsidiary Committee”). Likewise, the United States Trustee also appointed an official committee of unsecured creditors in ASARCO’s case (the “ASARCO Committee"), ‘The Court has not appointed a trustee or examiner in any of the Reorganization Cases. Overview oF ASARCO AND THE SUBSIDIARY DEBTORS 4. Originally organized in 1899 as American Smelting and Refining Company, ASARCO has operated for over 107 years—first as a holding company for diverse smelting, refining, and mining operations throughout the United States and now as a Tucson-based integrated copper-mining, smelting, and refining company. ASARCO js one of the leading producers of copper and one of the largest nonferrous metal producers in the United States with ‘over 2000 employees in Arizona and Texas. ! ‘The Subsidiary Debtors are the following five entities: Lac d’Amiante du Québec Ltée (Pla Lake Asbestos of Quebec, Ltd); Lake Asbestos of Quebec, Ltd; LAQ Canada, Ltd; CAPCO Pipe Company, Ine. (hal Cement Asbestos Products Company); and Cement Asbestos Products Company. DALIRATI361.7 22.5. ASARCO’s active operations consist of three open-pit copper mines in Arizona (the Mission Mine, the Ray Mine and the Silver Bell Mine), a copper refinery and precious- metals plant in Amarillo, Texas and a copper smelter in Hayden, Arizona. ‘THE TAX SHARING AGREEMENT. 6. Americas Mining Corporation (“AMC”), a wholly owned subsidiary of Grupo Mexico S.A. de C.V. (“Grupo Mexico”), is the parent company of a consolidated group of companies, including ASARCO (the “AMC Consolidated Group”), and as such, AMC files a consolidated income tax retum for federal income tax purposes. ASARCO Incorporated, a Delaware corporation, (“Asarco Delaware”), is ASARCO’s immediate parent and a member of the AMC Consolidated Group. Asarco Delaware is not a debtor. 7. AMC and ASARCO's predecessor, ASARCO Incorporated, a New Jersey corporation (“ASARCO NJ” or “Old Asarco”), entered into a tax sharing agreement, dated January 22, 2004 (the “Original Tax Sharing Agreement”), as subsequently amended. Approximately one year later, and five months prior to the Petition Date, in February of 2005, Grupo Mexico, the Debtor's ultimate parent company, and AMC caused a merger of Old Asarco into ASARCO LLC, a newly-created Delaware limited liability company. 8. After this merger, but prior to ASARCO's bankruptcy filing, an amendment to the Original TSA was entered into by AMC, Asarco Delaware, and ASARCO LLC (as amended, the “TSA,” a copy of which is attached hereto as Exhibit A). The amendment was made effective on February 17, 2005, but Debtor has been informed and believes that the amendment was actually not signed by AMC until June of 2005 and by ASARCO until days before the bankruptcy filing in August of 2005, DALO2477361.7 3.