Texans Credit Union is trying to recoup the balance on a $3.2million loan for a cypress mill that is at the center of a legalshowdown between Louisiana and the state's former agriculturecommissioner.

The $1.6 billion credit union in Richardson, Texas approved theloan to Louisiana State Cypress for the cypress mill, which is nowsitting idle in Tangipahoa Parish. The company failed when Wal-MartInc. stopped buying Louisiana cypress mulch in 2007, which led tothe mill shutdown, the Advocate reported.

When Louisiana State Cypress stopped making payments to Texans,the credit union sued the company and the state of Louisiana in2009 for the balance of the $3.2 million loan, according to thepublication.

The loan was made during former Louisiana State AgricultureCommissioner Bob Odom's tenure. Critics said Odom should havesought other state officials' approval in giving the state'sbacking on more than $14 million in debt for the cypress mill, acane syrup mill and a bond sale.

Louisiana state attorneys want the Texans lawsuit dismissedsaying Odom did not go to the State Bond Commission to authorizethe guarantee on the loan, the article read. The commission isresponsible for overseeing Louisiana's debts.

When contacted by the Advocate, Odom said he could not rememberthe guarantee of the loan for the cypress mill.

Mike Strain, Louisiana's current agriculture commissioner, saidhe tried to convince the legislature to pay the debt but was turneddown because the state did not have the money to pay the loan.

A 2010 judicial district ruling disagreed that the loanguarantee is unenforceable. The 1st Circuit Court of Appeal agreedand the state is now appealing to the Louisiana Supreme Court.

State District Judge Tim Kelley said even if Texans wins,collection may be difficult because separation of power issuesprevent the courts from ordering the legislature to appropriatemoney, the article noted.

Texans was placed in conservatorship by the NCUA April 15.