A federal appeals court has upheld a Helena judge’s ruling that Asarco is not entitled to have $1.2 million returned to the company from a trust it created to build a landfill at an old East Helena lead smelting plant.

An Asarco attorney had argued that that the trust no longer was needed because a new one was created in 2009 as part of a bankruptcy settlement. The company claimed that the purpose of the $100 million Montana Custodial Trust is for the cleanup in East Helena, so the separate trust for the landfill, created in 2007 by Asarco with $4.3 million in it, no longer was needed.

Senior U.S. District Court Judge Charles Lovell disagreed, writing in his August 2010 opinion that the landfill trust’s purpose has not been fulfilled because the U.S. Environmental Protection Agency is still working on the cleanup and has yet to close the second landfill, known as a “corrective action management unit” or CAMU.

He added that the EPA claims that the total cleanup costs for the East Helena Lead Smelter will exceed the funds of both trusts, and just because Asarco settled its East Helena claims in bankruptcy court for $100 million does not mean that the CAMU trust money is not needed for the cleanup.

Asarco took the decision to the Ninth Circuit Court of Appeals, but a panel of three judges agreed with Lovell in a recent opinion.

The judges said that not only has the CAMU trust’s purpose not been fulfilled, the bankruptcy settlement agreement has no bearing on the trust’s termination:

“… the trust’s language is clear that the trustee is to reimburse Asarco or other persons (now the EPA and the group managing the new trust) for work done on the CAMU Phase 2 Cell,” the appeals court noted. “Similarly, that the bankruptcy settlement agreement established a separate trust to fund cleanup activities at various locations, including at the East Helena site, which trust’s funds could be used by the government for the CAMU Phase 2 Cell, also has no bearing on the CAMU Trust’s termination. The CAMU Trust’s purpose is clear, and it has not been fulfilled or become impossible to fulfill as a result of any provision in the bankruptcy settlement agreement.”

Betsy Burns, who oversees the East Helena cleanup for the EPA, said the agency hasn’t permanently capped the landfill cell and is still putting lead-contaminated soils and other materials into it.

Reporter Eve Byron: 447-4076, eve.byron@helenair.com or Twitter.com/IR_Eve_Byron

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