By John Howell Sr.

Batesville aldermen voted Tuesday to employ Oxford attorney D. Andrew Phillips of the Mitchell, McNutt and Sams firm to protect the city’s interest in the LSP Energy bankruptcy proceedings under way in a Delaware bankruptcy court.

The energy company, whose assets include the Batesville gas-powered, electricity-generating facility, filed for Chapter 11 bankruptcy protection February 10.

“What’s coming, and it’s coming fast, is a motion to sell these facilities,” Assistant City Attorney Colmon Mitchell told city officials

At stake is $4.5 million in ad valorem and school taxes, including $800,000 owed to the City of Batesville. Mitchell said that Mitchell, McNutt and Sams firm would represent the interest of the city, county, Panola Partnership and the South Panola School District. The Mississippi firm would also engage the Blank Rome, LLP firm with attorneys in Delaware, Mitchell said.

Also at stake will be contractual agreements with the energy generator’s present owners giving the city the right to purchase excess gas through the natural gas pipeline serving the facility and the right to purchase excess water brought through a pipeline from Enid Dam, Mitchell said, as well as approximately $31,000 paid monthly to the Panola Partnership for economic development infrastructure construction and grant matching funds. The pipelines, built with state grant funds, are owned by the Panola County Industrial Development Authority (IDA).

“They’ve (attorneys representing LSP Energy in the bankruptcy) already indicated that they want to sell it free and clear of all encumbrances,” Mitchell said.

“We don’t want them to be able to sell it free and clear of all encumbrances,” Alderman Bill Dugger said. “We we don’t care who they sell it to, we want all the strings still attached.”

“We want the strings attached,” Mitchell agreed.

“It’s a 363 sale in bankruptcy; that’s not unusual at all,” Mitchell said. “Just about every time they do one in bankruptcy, they want it free and clear of encumbrances.”

“In bankruptcy, pretty much anything is doable,” the assistant city attorney said. “Our  job is to make sure that whatever the judge says is doable benefits the city, the county, the school and the Panola Partnership.”

“I think we need to vote to hire that lawyer,” Mayor Jerry Autrey said.

Aldermen voted 3-0 for a memorandum of agreement to join the county, school and Partnership to engage legal representation in the bankruptcy. They also agreed to pay up to one-fourth with the possibility of pro-rating the share of legal expense in proportion to the amount recovered.

Aldermen Ted Stewart and Stan Harrison joined Dugger for the unanimous vote. Aldermen Teddy Morrow and Eddie Nabors were absent.