The Atlanta-based company that owns a financially struggling detention center in South Georgia is not opposing the bankruptcy proceedings its creditors have forced on the Irwin County Detention Center.
Attorneys for Municipal Corrections LLC made that known this month when they filed court papers saying the company isn’t disputing its creditors’ claims and is consenting to relief through the Chapter 11 case.
The case is connected to $55 million in tax-exempt bonds Irwin County issued in 2007 to help pay off other bonds and to finance the expansion of the center in Ocilla. The bonds were to be paid off with revenue from the center, which receives federal funding for holding detainees for the U.S. Marshals Service and U.S. Immigration and Customs Enforcement.
But the center -- the county's largest private employer -- has not housed enough detainees to cover the bond payments, court records show. In February, the trustee in the arrangement -- UMB -- wrote to bondholders, saying the bond payments were in default.
A month earlier, at the county's request, an Irwin Superior Court judge ordered that the property to be sold at auction to cover a combined $1.6 million in back taxes owed to the county and the city of Ocilla for 2009 and 2010. The detention center’s tax sale was set for March 6. But its bondholders blocked that by filing a petition in a federal bankruptcy court, claiming $54.1 million in bond debt. The bondholders filed court papers last month, accusing the county of trying to use the tax sale to “wipe out any interest” they have in the facility.
Terry O’Brien, who owns Municipal Corrections; his company’s attorney; an attorney for UMB; and Joey Whitley, chairman of the Irwin County Board of Commissioners, did not immediately respond to requests for comment Friday.
About the Author
