EYEWITNESS LOCAL NEWSFreedom Industries Files For Chapter 11 Bankruptcy Protection
from Eyewitness News Online
Reported: Jan. 17, 2014 3:11 PM EST
Updated: Jan. 17, 2014 5:01 PM EST
CHARLESTON, W.Va. (Kallie Cart) – The Chapter 11 bankruptcy sought by Freedom Industries basically blames the water company for the spill at Freedom's facility in Charleston.
The filing was filed on behalf of Freedom Industries and its larger parent company, Chemstream Holdings. All of the documents were signed by Freedom Industry President Gary Southern. Freedom claims a water line break adjacent to its facility on Barlow Drive in Charleston may have contributed to freezing of the ground beneath the company’s storage tank, causing the hole that lead to that leak of MCHM that got into the Elk River
Mike Dorsey of the West Virginia Department of Environmental Protection said that didn't happen.
Freedom Industries does note that there is an ongoing investigation. The company also notes that this leak prompted a state of emergency where people were quote "encouraged” to refrain from using the water supplied by the local water company. In addition, Freedom said it understands that as a result of Gov. Earl Ray Tomblin telling people that -- that various businesses were closed.
Freedom also said because of all of the media coverage its vendors now require cash on delivery, and the company can't afford it.
Several businesses have already filed lawsuits against Freedom Industries, so have people who said they became sick because of the chemical leak. So what does this bankruptcy filing mean for those lawsuits?
According to the clerk in federal bankruptcy court -- the bankruptcy filing institutes an automatic stay on those lawsuits -- at least initially.
Freedom now has to submit a plan to the court on how they are going to reorganize their debt and pay its debtors. But this is a way for the company to protect its assets, and will, of course, slow this entire legal process.
Eyewitness News also found out Freedom Industries owes nearly 2.4 million to the IRS, and about $4,000 to the state for unpaid unemployment compensation tax. Freedom made $30 million in gross revenue last year.
CHARLESTON, W.Va. (Kallie Cart, Jeff Morris) -- Freedom Industries, the company responsible for a chemical leak that led to a massive water crisis in the region, has filed for bankruptcy.
The company filed for Chapter 11 bankruptcy protection in Charleston federal bankruptcy court, court documents said.
Freedom's effort to seek bankruptcy protection comes at a time when it faces multiple class-action lawsuits over the leak that prompted West Virginia American Water to issue a do-not-drink water advisory that affected nine counties.
The West Virginia Department of Environmental Protection also has ordered the company to cease operations at its Barlow Drive facility near Charleston, where the leak occurred, while the site is cleaned up.
Earlier this week, the DEP said it issued five citations to the company related to the storage of 4-Methylcyclohexane Methanol (MCHM) at Poca Blending in Nitro. Some of the chief concerns are there is no secondary containment in the event of another leak or plans on what do in an emergency, the DEP said. Freedom was ordered to provide plans to the state agency addressing the issues.
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