- Associated Press - Monday, October 27, 2014

PASCAGOULA, Miss. (AP) - A Pascagoula fertilizer plant that has faced environmental scrutiny has filed for Chapter 11 bankruptcy protection, saying it needs debt relief.

Mississippi Phosphates Corp. filed Monday in U.S. Bankruptcy Court in Gulfport, listing assets and debts between $100 million and $500 million.

Two small subsidiaries also filed for Chapter 11, each listing debts and assets of $1 million to $10 million. But parent company Phosphate Holdings Inc. did not seek protection, which could help it to maintain control of the companies.

In court papers, Mississippi Phosphates said it has 224 employees and 26 contractors. The company said it hasn’t laid off or furloughed any employees so far.

“We expect that through this filing, we can gain needed relief, secure an updated credit and funding facility and return to production operations in an expedited manner,” CEO Stephen Russo said in a statement. “In addition to resuming operations, our plans call for the Company to continue maintenance and all environmental and safety programs during this reorganization.”

Formerly a part of Yazoo-City-based Mississippi Chemical Corp., Mississippi Phosphates previously filed for Chapter 11 reorganization in May 2003, emerging in March 2006.

Mississippi Phosphates has been fined repeatedly in recent years for releasing acid into the air and water at its Bayou Casotte plant. In its filing, the company said it doesn’t have any property that “poses or is alleged to pose a threat of imminent and identifiable harm to public health or safety.”

The company has reported at least two sulfuric acid releases this year, and residents near the plant have complained of acid mists. A wastewater system is supposed to control acid releases into waterways from two giant hills of gypsum byproduct, but multiple acid releases have been recorded, including some that harmed the nearby Grand Bay National Estuarine Research Reserve.

Mississippi Phosphates said it will ask a judge to authorize it to continue normal business operations while management plans bankruptcy reorganization. It said the Chapter 11 filing was necessary “to obtain sufficient additional funding for its ongoing operations.”

The company said it stopped production of diammonium phosphate fertilizer last week because of a shortage in raw materials.

There are signs that financial stress had been mounting for some time - for example, the company was late in paying its property taxes last year.

Pascagoula Port Director Mark McAndrews said Mississippi Phosphates had fallen behind on its water bills sometime within the last year. He said the company and Jackson County Port Authority had been negotiating a payment plan to catch up on the debt, but when the company filed, it owed $387,000 to the authority.

Overall, the company owes almost $20 million to unsecured creditors, including $4.7 million to a Moroccan government-owned company that is the world’s largest phosphate producer.

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