A federal bankruptcy judge is becoming increasing concerned that Freedom Industries may abandon its former Elk River chemical storage facility without completing a proper environmental cleanup of the site of the January chemical spill that contaminated the drinking water supply for hundreds of thousands of residents across the region.

U.S. Bankruptcy Judge Ronald Pearson says that the Freedom bankruptcy proceeding has not progressed adequately, and that too much of the companys limited cash is being earmarked for attorneys, perhaps leaving not nearly enough to complete remediation required by existing enforcement orders from the state Department of Environmental Protection.

In a seven-page order filed Friday evening, Pearson said recent bankruptcy case filings by Freedoms lawyers cause him to fear [Freedom] is not sufficiently committed to compliance with the demolition and cleanup orders of the DEP or other agencies of the state and federal government.

Pearson cited language in Freedoms proposed plan for liquidating the company stating that, while efforts will be undertaken to remediate the site, there are financial limitations to what Freedom can viably undertake by way of compliance with the remediation plan for its Etowah Terminal, site of the Jan. 9 leak of Crude MCHM and other chemicals into the Elk River. Negotiations are ongoing with DEP regarding the financial cleanup parameters, Freedom had said in its liquidation plan, filed with the court in mid-August.

Freedoms liquidation plan stated that the company intends to satisfy the remediation plan for $850,000 or less, plus applicable consulting costs, or alternatively seek to abandon the Etowah site (subject to order of the bankruptcy court).

Pearson noted that Freedom is already under orders from DEP to dismantle the Etowah Terminal and remediate the site.

The court believes this environmental responsibility has the highest administrative priority for funds, the judge wrote. Nothing in the proposed plan and disclosure statement give the court comfort that this is understood. This expressed intention of the debtor to potentially abandon the Etowah site should DEP not be satisfied with whatever remediation could be done for a cost of $850,000 is no comfort. It causes the court to believe that serious questions exist as to the extent to which the debtor intends to comply with existing demolition and cleanup orders and pay necessary environmental administrative claims to do so.

The judge scheduled a hearing for Sept. 23 to allow Freedom to address the concerns expressed in Fridays order and to outline a plan to fund all remaining demolition and reclamation required by state and federal regulatory agencies.

Pearson outlined his concerns in an order in which he rejected Freedoms request to extend the timeframe for the company to have the exclusive right to submit a bankruptcy plan and in put on hold pending requests from various lawyers and consultants providing services to Freedom during the bankruptcy proceeding.

The judge cited substantial existing and escalating administrative costs of the case and incomplete and unknown site remediation work and said mounting questions about the way the case is being handled prohibit him from moving forward at this point to distribute Freedoms limited resources to creditors and claimants.

Originally posted here:

Judge concerned Freedom Industries won't clean up Elk River facility