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March 11, 2010

Delphi, GM making tax payments

County has received $3.6 million

By KEN de la BASTIDE

As proposed in an agreement with Howard County officials, Delphi Corp. and General Motors Co. are making regular payments on back taxes.

As of Wednesday, GM and Delphi have provided the Treasurer’s office with tax payments of $3,345,763 and interest payments of $262,719.

When Delphi filed for bankruptcy protection, it paid only a portion of the personal and real estate taxes owed for 2005, payable in 2006.

The total amount owed to local taxing units was $6,497,187.

Last year the federal bankruptcy court signed an order outlining how the taxes would be paid.

Personal property assessed March 1, 2005, for $4,615,399, must be paid in full by March 1, 2011, with an interest rate to be set by the court.

The real estate taxes for 2005 in the amount of $1,881,860 will be paid over the next seven years, with an interest rate of 5 percent.

Treasurer Martha Lake said Delphi has paid all the taxes owed to local taxing entities, except for the 2005 taxes that were payable in 2006.

County Attorney Larry Murrell said the county had every expectation that the taxes would be paid in a timely manner.

“There was good-faith negotiations,” he said. “Everyone was happy with the results. We gave a little, and they gave a little.”

Murrell said as the tax payments are received, the funds will go back to the state of Indiana, which provided no-interest Rainy Day Fund loans to Howard County taxing units as a result of the Delphi bankruptcy.

Taxing units that didn’t borrow money from the state will receive their share of the tax revenue.

Howard County officials negotiated with both Delphi and Chrysler LLC (Old Carco) through the bankruptcy process and reached agreements for the payment of all taxes.

“The hard part was reaching the Delphi agreement,” Lake said. “This is great for the county. We’re relieved the money is coming in as promised. There was a lot of cooperation.”

Dick Miller, president of the Howard County Council, said going through the Delphi bankruptcy procedure helped prepare the county for the Chrysler bankruptcy in 2009.

“Howard County was very quick to react,” he said. “The day we learned of both bankruptcies, we put things into motion.”

Miller said representation by the Indianapolis law firm Barnes & Thornburg during the Delphi bankruptcy in federal court was invaluable.

Lake said the Howard County delegation in the Indiana General Assembly supported the county’s efforts to secure loans during both bankruptcy proceedings.

• Ken de la Bastide is enterprise editor of the Kokomo Tribune. He can be reached at ken.delabastide@kokomotribune.com or 765-454-8580.

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