By John Howell Sr.

UPS Capital Business Credit has objected to ad valorem tax claims lodged by Panola County’s tax assessor/collector and chancery clerk against the bankrupt Tri-Lakes Medical Center.

David Garner and Jim Pitcock have filed claims in U. S. Bankruptcy court to collect $439,000 in delinquent taxes owed the county.

UPS Capital, which loaned Physicians and Surgeons Hospital Group the $27.5 million to purchase Tri-Lakes from the City of Batesville and Panola County in 2005, says that Mississippi law exempts the non-profit community hospital from ad valorem taxes. Tri-Lakes declared bankruptcy in August 2007.

Garner and Pitcock base their claim for ad valorem taxes on the June 2005 purchase and sale agreement between Physicians and Surgeons Hospital Group and the city and county. In the purchase and sales agreement Physicians and Surgeons Hospital Group agreed to pay the ad valorem taxes even though it was incorporated as a 501(3)c tax-exempt corporation.

UPS Capital, through attorneys, Andrew R. Turner of Tulsa, Okla. and Henry J. Applewhite of Aberdeen, on June 10 filed the objection stating the claims are “unenforceable under applicable state law as allowance of the claim would violate Mississippi law exempting non-profit hospital from taxation …”

Garner said that the claim for the 2006 taxes were filed with the hospital before the bankruptcy declaration.

Taxes for at least one of the years for which county officials believe the hospital is liable is further complicated by the third party payment of at least one year’s taxes. Investors buy property in tax sales to earn the 18 percent per annum allowed by law when the owner redeems the property.

Holly Springs investor Frank Hurdle paid the 2006 taxes. “Somebody’s going to pay Frank Hurdle his money. If not, he’s going to have a tax deed to it,” Pitcock said.