While secured creditors and bondholders as well as unsecured creditors through their attorneys seek to make good on their due in the LSP Energy bankruptcy taking place in U.S. Federal Court in Delaware, many here in Panola County could have much to lose from outcome.

Although millions in property taxes are in arrears, it is not so much what is due from the past, but what we can expect from the future.

Court filings indicate existence of $220.6 million in secured bonds and one of the largest unsecured debtors, Siemens, holds claims in excess of $25 million against LSP Energy, according to court documents.

That makes Panola County and other locally affected entities seem like small fish in a big pond— a pond miles away.

In that pond are all of Panola County’s tax payers and all of the children and taxpayers of the South Panola School District as well as Panola Partnership, the county’s economic development arm.

The power generating facility was valued at $200 million for taxing purposes which equals a $30 million taxable asset on the county’s rolls. From those rolls, a formula is used for county government, schools and other agencies to get funded. You don’t have to be Einstein to figure that taking $30 million out of the formula would change millage drastically.

Batesville Mayor Jerry Autrey said city department heads had made cuts to deal with that entity’s $800,000 shortfall from LSP Energy’s taxes in arrears.

And County Administrator Kelley Magee noted that the county’s general fund was feeling the squeeze of the $1.8 million tax debt but the county is being conservative with expenditures and allotments owed to outside agencies which have yet to be dispersed.

School officials are working closely with the county administrator’s office and superintendent Dr. Keith Shaffer has said the district is managing with its reserves through the first of the 2012-2013 term. They are currently owed $1.8 million.

The school could go ahead and request a tax shortfall note and get their share, a move that would add roughly 2.5  mills to tax levies for that district for three years.

But school officials have decided to roll the dice with hopes that taxes in arrears will come relatively soon.
The county administrator said, “They’ve got the hard call,” noting that school officials can’t ask for a shortfall note for last year, once the opportunity is passed up this year.

Magee expressed that her concerns were not for what is currently owed, but for the big picture—what can be expected in the future.

That future is now in the hands of U.S. Federal Court in the Deleware District where Judge Mary F. Walrath is presiding.

Bids were due yesterday, an auction will be held next Monday and the final sale is September 20.

We all have a lot at stake.