Mississippi Phosphates creditor opposes asset sale on easement rights

By Kali Hays

New York, Jan. 20 – Mississippi Phosphates Corp. creditor Mississippi Power Co. objected to the company’s proposed sale of substantially all company assets, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of Mississippi.

As previously reported, assets being sold include fertilizer production facilities and chemical storage tanks used in production, all of which are located in Pascagoula, Miss.

Mississippi Power is the electricity provider for the facilities and holds pre-bankruptcy debt against the company of about $1 million, along with certain easements and property interests, according to the objection.

The creditor claims that “any attempt to sell debtors’ real property should be subject to MS Power’s easement, regardless of how such easement came into existence and those rights should not be extinguished due to a sale.”

“The applicable non-bankruptcy law in this setting, Mississippi law, does not allow for debtors, or even a secured lender through foreclosure, to sell the real property free and clear of easements obtained by MS Power,” the objection stated.

If the court approves the sale, Mississippi Power asked that language akin to its objection be incorporated into the proposed bid procedures.

As previously reported, Mississippi Phosphates does not have a stalking horse bidder, but the deadline to submit bids is Feb. 27.

Though a value estimate was not included in the bid procedures motion, the company said “the value of the sale assets will be established through the auction and sale process.”

The company asked that an auction be scheduled for March 6, with a sale hearing held on March 13.

Mississippi Phosphates, a Pascagoula, Miss., fertilizer company, filed for bankruptcy on Oct. 27. The Chapter 11 case number is 14-51667.

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