Checks suspended for 117 ex-workers, many hurt on job
Tucson-based Asarco LLC has stopped paying disability pensions to 117 former workers, many of whose careers ended with on-the-job injuries.
Company officials said they hope to reverse the move by early October and again start paying the monthly checks of up to around $1,000.
"Last month, they gave me a courtesy call, or so they called it, to tell me that they were going to terminate my disability payments because the bankruptcy court told them to," said Mammoth resident Joe Brewer, who spent 25 years working at Asarco's Hayden Smelter before a train derailment disabled him in 1996. "While Asarco is making up its mind what to do, I'm living without it, living very tight, paying one bill and letting another one go."
An Asarco bankruptcy attorney said the suspension of payments was necessary because some disabled pensioners were paid out of Asarco's general fund. That fund became subject to review and approval by creditors and the court after Asarco filed for bankruptcy protection Aug. 9, said Jim Prince, a Dallas bankruptcy attorney representing Asarco.
"We have been working with our creditor groups to allow us to restore those long-term disability payments and have forwarded a proposed stipulation," Prince said.
The proposal will be sent to several creditor committees and ultimately to a bankruptcy judge, Prince said. If it is approved, Asarco could resume paying the benefits and compensating people for back payments within two to three weeks, he said.
"This is work that's been in progress for a few weeks," he said. "These are technically 'general unsecured' claims, among thousands of other such claims, so we have to get court authorization to resume making these payments."
The lead union negotiator in the 82-day-old strike at Asarco's operations in Arizona and Texas said the company has taken the position that it doesn't have to make payments to workers covered under the "Copper Group" contract. That contract includes workers at the Mission and Silver Bell mines near Tucson, the Hayden Smelter and a refinery in Amarillo, Texas.
Former workers under the "Ray Group" contract, which covers workers at the Ray Mine and the Hayden Mill, have not lost benefits, said Terry Bonds, District 12 supervisor for the United Steelworkers of America.
"In the Copper Group contract, their disability pensions are not part of the pension agreement and were instead paid out of the general fund of Asarco, and Asarco apparently thinks that they don't have to make those payments due to their bankruptcy," Bonds said. "It's our opinion that those benefits should absolutely be paid, no matter what is happening with the bankruptcy."
The union is on the creditor committee and received no notice of the decision to stop the payments, Bonds said. Union documents show that 107 hourly workers and 10 salaried employees had been receiving some type of disability pension that ceased after Asarco's bankruptcy announcement, he said.
"From what we understand, this is not affecting workers who retired, or workers who are disabled but are presently still employees, but it is affecting people who retired due to disabilities," he said.
A former Mission Mine worker said he learned about the cessation of his payments the hard way.
"In August, they deposited my check and then they withdrew it," said Bill Virgil, 40, who worked at the mine for 12 years before a severe back injury permanently disabled him in 1997. "They didn't even have the nerve to call or send a letter. They just did it."
The company informed some disabled retirees with letters and called others, but 52-year-old Tomas Escalante of Winkelman had to take the initiative, he said.
"I just heard from other guys in my situation that they had gotten letters or calls, so I called them myself," said Escalante, who worked at the Hayden Smelter for 31 years. "They told me they had called me, and I said, 'Nobody has called me. I have caller ID,' and they said, 'Well, you won't be getting any checks.' "
Escalante has received about $1,000 a month since his disability forced him to retire in 2001, he said.
"Thank God for my wife," Escalante said. "If it wasn't for her helping me out right now, I don't know what I'd do, and a lot of guys in my situation don't have anybody."
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