Mississippi Phosphates asks court to approve alternative transaction

By Mark Reccek

Bethlehem, Pa., Aug. 19 – Mississippi Phosphates Corp. requested approval of an alternative asset purchase agreement after its initial asset sale did not close on time, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Mississippi.

The alternative agreement provides for the creation of the liquidation trust and the environmental trust pursuant to the environmental trust agreement and liquidation trust agreement filed on Aug. 4.

The liquidation trust asset purchase agreement “must be approved to enable the debtors to close and consummate the sale of assets by the debtors to the liquidation trust,” the motion said.

According to the settlement agreement and the amended sales and bidding procedures, the agent for, and on behalf of the lenders, is entitled to a credit bid up to $15 million of their respective total claims pursuant to the bankruptcy code and the terms of the interim debtor-in-possession order.

The agent is also deemed to be a qualified bidder under the amended sales and bidding procedures. The agent will designate the liquidation trust as the agent’s designee and assign the liquidation trust the $15 million credit bid to purchase the liquidation trust acquired assets.

Specifically, the liquidation trust agreement provides for the acquisition of the liquidation trust acquired assets by the liquidation trust, facilitates the sale of the real and personal property of the liquidation trust to a buyer or buyers and establishes the distribution structure for the sale proceeds of the liquidation trust acquired assets.

Proceeds of the alternative sale would be distributed to lender claimants and fund any environmental actions taken by the environmental trust. The bankruptcy estate would receive up to $6 million of any sale proceeds for the payment of DIP and exit financing obligations.

As previously reported, Mississippi Phosphates reached an agreement with its lender parties outlining an alternative transaction. Other parties to the settlement include Mississippi Phosphates’ affiliate Phosphate Holdings, Inc., its lenders’ administrative agent STUW LLC, the Environmental Protection Agency and the Mississippi Department of Environmental Quality.

Any sale transaction is required to close by Sept. 1.

Mississippi Phosphates, a Pascagoula, Miss., fertilizer company, filed for bankruptcy on Oct. 27, 2014. The Chapter 11 case number is 14-51667.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.