LSP Energy-auction

Published 12:00 am Wednesday, August 8, 2012

Auction next step for LSP Energy

By Rupert Howell

U.S. Bankruptcy Judge Mary F. Walrath officially denied South Mississippi Electric Power Association’s (SMEPA) bid while amending bidding procedures for the LSP Energy power producing plant located in Batesville last week with yesterday, August 6, as the new deadline.

An auction involving those bids will be held next Monday, August 13 with the sale hearing scheduled September 20.

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“Things are beginning to move mighty fast,” Attorney Colmon Mitchell said Monday after revealing the new dates.

Mitchell’s firm, Smith, Phillips, Mitchell, represents several of the entities who have major interest in the bankruptcy’s outcome.

Previous court filings indicated that at least two potential bidders were willing to best SMEPA’s bid. An informal group of debtors had suggested a “stalking horse” or favored bidder but a “break-up” fee of approximately $7.5 million was deemed too excessive by some of the other debtors and bidders. The break-up fee would be payable to the favored bidder  if that bid was beaten by other bidders and would force what others thought were unreasonable and inappropriate advantages.

Judge Walrath denied the original motion and changed bidding procedures setting the new dates soon after.

Local governmental entities are concerned as non-profit electric power distributing cooperatives are not liable for ad valorem taxes. SMEPA falls into that category and while it is not known who all the bidders are, at least two are for profit concerns that would not qualify for the tax advantage.