South Mississippi Electric Power Association (SMEPA) confronted multiple challenges in its purchase of LSP Energy’s Batesville plant out of bankruptcy, and Sutherland attorneys provided advice every step of the way. The deal, which closed in December 2012, survived a court-ordered auction, mechanical problems at the plant and a protest from a local government agency. Sutherland Partners Thomas H. Warren and Mark D. Sherrill and Associate W. Jason Allman led the team that advised on the transaction, which involved all assets of the natural gas-fueled plant.
SMEPA had exclusive rights to the capacity and energy from Batesville’s Unit 3 through an agreement that was in place when LSP filed for bankruptcy protection in early 2012. The non-profit cooperative that generates, transmits and sells wholesale electric energy to 410,000 homes and businesses, eventually acquired the plant in an auction in federal bankruptcy court in Delaware. Panola County, Miss., had objected to the sale, arguing that SMEPA’s tax exemption as a utility would further deprive the county of millions of dollars of future tax revenue. To address these concerns, SMEPA agreed to assume an economic development agreement and make a one-time payment.