Freedom Industries seeks bankruptcy

Published: Friday, 17 Jan 2014 | 4:33 PM ET

Specialty chemicals maker Freedom Industries filed for Chapter 11 bankruptcy on Friday, eight days after a leak from one of the company's storage tanks contaminated drinking water for hundreds of thousands of West Virginia residents.

A chemical used to process coal spilled into the Elk River in Charleston last week, prompting the state's governor to declare a state of emergency and ban the use of drinking water. More than 200 people have visited emergency rooms with nausea.

Ty Wright | The Washington Post | Getty Images

Workers walk behind the fence at the Freedom Industries building in Charleston, West Virginia on Saturday, January 11, 2014.

As a result of the leak, vendors have demanded Freedom pay in cash, draining the company of financing and prompting it to seek bankruptcy, according to documents filed in the U.S. Bankruptcy Court in Charleston, West Virginia.

"Likewise, the defense of the numerous suits filed against the debtor will exhaust the debtor's liquidity," Freedom said in a court filing. The bankruptcy filing will put a stay on more than 20 lawsuits filed against the company over the spill.

The company filed an emergency motion seeking court authority to borrow an initial $4 million from WV Funding LLC.

The company estimated it had up to $10 million in both assets and liabilities, according to the filings.

The case is In re Freedom Industries Inc, U.S. Bankruptcy Court, Southern District of West Virginia, No. 14-20017

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Freedom Industries seeks bankruptcy

Freedom Industries, Company Behind W.Va. Spill, Files for Bankruptcy

Residents and businesses in West Virginia have filed nearly two dozen lawsuits against Freedom Industries, the company that owns the storage container responsible for leaking chemicals into the Elk River on Thursday, Jan. 9, 2014. State officials issued a ban on water consumption for the next five days.

Freedom Industries Inc., the company responsible for a chemical spill that poisoned drinking water for more than 300,000 people in West Virginia, filed for Chapter 11 bankruptcy Friday afternoon.

The company submitted a petition at 1:25 p.m. to the United States Bankruptcy Court for the Southern District of West Virginia, said Matthew J. Hayes, clerk of the court.

The petition lists estimated assets ranging from $1 million to $10 million, and estimated liabilities also ranging from $1 million to $10 million, Hayes said.

[READ: West Virginia Chemical Spill Company Slapped With Violations]

Chapter 11 allows a company to continue operating as it reorganizes.

Freedom Industries did not immediately return a call for comment Friday afternoon. The filing was first reported by The Charleston Gazette

The company has been hit with at least 22 lawsuits from residents and business owners since last Thursday, when state officials discovered that one of the company's storage containers near the Elk River had ruptured, leaking at least 7,500 gallons of a coal-processing agent into the waterway about a mile north of a water treatment plant.

[ALSO: As Water Flows Again in W.Va., Lawsuits Begin to Pour In]

The spill forced officials to institute a water ban for nine counties, barring residents and businesses from using the water for anything other than fighting fires or flushing toilets.

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Freedom Industries, Company Behind W.Va. Spill, Files for Bankruptcy

Freedom Industries Files Bankruptcy

The Board of Directors of Freedom Industries decided during a special meeting Jan. 17 to file a voluntary petition for bankruptcy protection.

Freedom Industries is the company responsible for the leak of 4-methylcyclohexane methanol, a coal cleaning chemical that leaked into the Elk River Jan. 9 causing a "do not use" order for some 300,000 people in parts of nine Southern West Virginia counties who are customers of West Virginia American Water.

U.S. Attorney Booth Goodwin said the filing does not change anything from his perspective, in terms of a federal investigation.

The petition explains that Freedom Industries is in the business of producing specialty chemicals for the mining, steel and cement industries. Its assets are listed as between $1 million and $10 million.

The petition goes on to describe the Jan. 9 "incident," explaining that "facts surrounding the incident are subject to pending investigation by Freedom and various regulatory and other governmental authorities."

"It is presently hypothesized that a local water line break adjacent to the Charleston Facility may have or contributed to the ground beneath a storage tank at the Charleston Facility to freeze in the extraordinary frigid temperatures in the days immediately preceding the Incident," the filing reads. "The debtor and investigative authorities have taken note of the hole in the affected storage tank that appears to have come from an object piercing upwards through the base of the affected storage tank.

"Investigations by multiple agencies are ongoing with full cooperation by the debtor."

The filing states that the company has at least 200 creditors, and its top creditors are owed $3.66 million. The list of the company's 20 largest creditors includes D Car LLC of Evansville, Ind. listed as having a $561,518.75 claim against Freedom Industries, FloMin Coal Inc., an Atlanta company listed with a $648,221.70 claim against Freedom along with Eastman Chemical Co., a Philadelphia company with a claim total of $127,474.83 according to the filing and Archer Daniels Midland of Duluth, Ga. listed with a $428,768.12 claim against Freedom.

Gary Southern, president of Freedom Industries, signed the filing. The corporate ownership statement lists Chemstream Holdings Inc. as a corporation that directly or indirectly owns equity interests in Freedom Industries.

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Freedom Industries Files Bankruptcy

Freedom Industries Files Chapter 11 Bankruptcy

Freedom Bankruptcy Filing

CHARLESTON, W.Va. (WSAZ) -- The company related to the chemical leak that caused hundreds of thousands of people in West Virginia to go without water filed for bankruptcy Friday.

According to court records, Freedom Industries Inc., located along Barlow Drive, filed for Chapter 11 bankruptcy.

West Virginia American Water customers in parts of Cabell, Boone, Putnam, Kanawha, Lincoln, Logan, Clay, Jackson and Roane counties were put under a "do not use" ban on January 9 after a chemical at Freedom Industries in Charleston leaked into the Elk River.

In the federal documents, Freedom Industries had to describe the nature and location of the dangerous condition.

Freedom Industries writes "facts surrounding the incident are subject to pending investigation by Freedom and various regulatory and other government authorities."

The company goes on to say "it is presently hypothesized that a local water line break adjacent to the Charleston facility may have or contributed to the ground beneath a storage tank at the Charleston facility to freeze in the extraordinary frigid temperatures in the days immediately preceding the incident. The Debtor and investigative authorities have taken note of the hole in the affected storage tank that appears to have come from an object piercing upwards through the base of the affected storage tank. Investigations by multiple agencies are ongoing with full cooperation by the Debtor."

Later Friday, a state DEP spokesman said a company's bankruptcy status does not absolve it of its environmental remediation obligations.

The substance released from the tank has been referred to as methylcyclohexane methanol or MCHM. MCHM is used by customers of Freedom to treat coal and reduce the amount of ash during the coal preparation process, according to the documents.

In the document, Freedom Industries said it contacted the water company.

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Freedom Industries Files Chapter 11 Bankruptcy

W. Va. company in spill files for bankruptcy

Workers inspect the Freedom Industries storage facility in Charleston, W.Va.

NEW YORK (CNNMoney)

The company, which is based in Charleston, W. Va., where the spill occurred, estimated it has assets of between $1 million and $10 million, but that it has liabilities within the same range.

The company's filing doesn't provide extensive details on last week's spill. The document says it's "presently hypothesized" that the break of a local water line near the Charleston facility may have contributed to the freezing and rupture of a chemical storage tank that then leaked into the Elk River.

The chemical in question -- methylcyclohexane methanol, or MCHM -- is used by Freedom's customers to treat coal during the coal preparation process. The disaster resulted in a state of emergency in nine West Virginia counties, causing the loss of water supplies for roughly 300,000 residents and the shuttering of a number of businesses in the affected area.

A bankruptcy filing could protect Freedom's assets in the case of court judgments against it.

A person who answered the phone at Freedom Industries on Friday declined to comment.

Related: New health hazard, same story in West Virginia?

The news came Friday as West Virginia authorities announced that thousands more water customers have been given the green light to resume using tap water following the spill.

The end of the "do not use" order for residents in the West Virginia communities of Eskdale, Leewood, Ohley and Elkview means more than 220,000 of the approximately 300,000 people originally affected by the incident have been cleared to resume using tap water.

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W. Va. company in spill files for bankruptcy

West Virginia chemical company files for bankruptcy after leak

Bombarded by lawsuits and under federal investigation, the chemical company that spilled a dangerous solvent into a West Virginia river and fouled the drinking water of 300,000 people filed for federal bankruptcy protection Friday.

Freedom Industries Inc., owner of a storage tank that ruptured Jan. 9 and spilled 7,500 gallons of a coal-treatment foaming agent called MCHM into the Elk River, sought protection from creditors under a Chapter 11 filing by its parent company, Chemstream Holdings Inc. of Pennsylvania.

The filing will protect Freedom from creditors, temporarily halt lawsuits against it and allow the company to continue operating.

The spill prompted the governor to order residents of nine counties in the Charleston area not to use tap water for anything but flushing toilets. No baths, no washing dishes; even boiling the water could not make it safe.

In court documents, Freedom Industries says a water line break brought on by frigid temperatures may have caused "an object piercing upwards" to punch a hole in the 35,000-gallon storage tank, allowing the chemical to flow down an embankment into the river. The Freedom facility is just upstream from a major water treatment plant.

Freedom says in its filing that the water line scenario is "hypothesized" and intended for "explanatory purposes only." The hypothesis, it says, is not intended as a legally valid explanation in defense against any lawsuit.

Eight businesses and individuals filed a joint class action suit Monday in federal court in Charleston against Freedom, the local water company and the Tennessee chemical company that produced the MCHM, which is used to wash coal. The suit alleges that the companies either failed to take reasonable precautions to prevent the spill or concealed the true dangers of the chemical.

In addition, at least two dozen lawsuits against Freedom and other companies have been filed in state court in West Virginia. The U.S. attorney in Charleston has launched an investigation.

Kevin Thompson, a Charleston lawyer who filed the federal class action suit, said in an interview Friday that Freedom seemed to be claiming that a shard of ice from the water pipe rupture pierced the storage tank.

"That sounds pretty preposterous," Thompson said. "It's not much of a steel tank if a chunk of ice can pierce it."

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West Virginia chemical company files for bankruptcy after leak

Freedom Industries Files for Bankruptcy in West Virginia

Freedom Industries Inc., the chemical maker whose leaky storage tank polluted the Elk River last week and shut down water service in West Virginias biggest city, filed for bankruptcy to cope with the subsequent lawsuits.

Freedom Industries listed assets and debt of $1 million to $10 million each in a Chapter 11 petition filed yesterday in U.S. Bankruptcy Court in Charleston, West Virginia. The company said the lawsuits and more stringent payment demands from vendors since the incident compelled it to seek court protection.

They are woefully underestimating their liabilities, said Aaron Harrah, a lawyer representing the owner of a Charleston bar and restaurant in a lawsuit against Freedom. Harrah said in a phone interview that hes hopeful his client will still get a payout from Freedom Industries.

A bankruptcy filing halts most litigation, forcing plaintiffs to vie with other creditors for a share of a companys assets. More than two dozen lawsuits have been filed since the accident, which led President Barack Obama to declare a state of emergency for the affected counties. The state attorney general is investigating the spill.

On Jan. 9, West Virginia officials discovered a leak from a 35,000-gallon (133,000-liter) tank of 4-methylcyclohexane methanol, a chemical used in coal processing. About 7,500 gallons escaped from a one-inch hole, compromising water for about 300,000 people and sending more than 100 to the hospital.

Freedom Industries said the current hypothesis for the accident is that a local water line broke next to its plant, causing the land underneath the tank to freeze in the extraordinary frigid temperatures in the days immediately preceding the incident, according to bankruptcy papers.

A woman who answered the phone at Freedom Industries headquarters and declined to give her name said no one at the company was commenting to the media.

The petition and related pleadings speak for themselves, Mark Freedlander, the companys bankruptcy lawyer, said in a statement, declining to comment further.

Companies facing legal costs and damages following accidents may use U.S. bankruptcy law to protect assets. In August, Montreal, Maine & Atlantic Railway Ltd., the operator of the runaway oil train that exploded and killed 47 people in a Quebec town, said it was forced to file for bankruptcy because of potential liability from the crash.

Charleston-based Freedom Industries was formed in 1986 and supplies specialty chemicals to the steel, cement and coal-mining industries. The closely held company completed a four-way merger nine days before the leak was discovered.

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Freedom Industries Files for Bankruptcy in West Virginia

Putin: Gays must ‘leave children alone’ in Sochi

Posted January 17, 2014

Rainbow-colored outfits for volunteers invoked questions about gay rights to Vladimir Putin (center). (Sasha Mordovets/Getty Images)

Gay rights has been a theme leading up to the Sochi Games because of Russias anti-gay initiatives, including a law on homosexual propaganda that was enacted last year.

Russian president Vladimir Putin said members of the LGBT community will not be subjected to harassment at the Olympics so long as they stay away from children, The Guardianreported on Friday, citing Russian media outlets.

We do not have a ban on non-traditional sexual relationships, Putin said during a meeting with thousands of Olympic volunteers in Sochi. We have a ban on the propaganda of homosexuality and pedophilia. I want to underline this. Propaganda among children. These are absolutely different things a ban on something or a ban on the propaganda of that thing.

SI WIRE: IOC: No We the people on U.S. goalie mask

Putin added that he believes Russia is more liberal on gay rights than many other countries, including the U.S., where he said homosexuality is still punishable by law in some states.

We are not forbidding anything, and nobody is being grabbed off the street, and there is no punishment for such kinds of relations, Putin said. You can feel relaxed and calm [in Russia], but leave children alone please.

The propaganda law may prevent athletes or spectators from displaying rainbow flags or gay rights placards, The Guardian reports.

And while Putin has maintained that nobody will be discriminated against at the Games, he said on Friday that Russia is a traditional country and refuses to accept European values on sexual orientation, according toThe Guardian.

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Putin: Gays must 'leave children alone' in Sochi

Aperion Audio’s Allaire Bluetooth Speakers nail every feature and sound spectacular

As we see it, the problem with the modern wireless speaker model is that, too often, sound quality takes a back seat to portability. Portability is great, but the market is still begging for compact, wireless desktop or bookshelf speakers that offer all the benefits of a hi-fi system stereo separation, tuned cabinets, full, refined bass, multiple intputs, etc. but with the modern convenience of wireless audio streaming, built-in amplification, and device charging. Looks likeAperion Audiomay have just answered the call.

Some products have gotten dangerously close to our ideal system. TheNuForce S3-BTsounded great and offered device charging and analog input flexibility, but they lacked a digital input and subwoofer output. TheNocs NS2 Air Monitorslooked and sounded excellent too, but they are locked into the Apple eco-system, can be tricky to set up, and they dont charge devices at all. And then theres the Paradigm A2, which offer some unique features and jaw-dropping sound quality, but theyre a bit bulkier that most folks are looking for in a desktop solution, arent wireless out of the box and dont sport a digital input. Even the highly-regardedAudioEngine lineupdoesnt check all the boxes.

Aperions Allaire Bluetooth speakers manage to nail down everything weve been looking for and wrap it all up in one very attractive, sweet-sounding package. The speakers offer an analog input, digital optical input, Bluetooth streaming capability, USB charging port and a subwoofer output. In the box iseverythingyou need to get the system set up and running. Optical cable, two different analog cables, high-gauge speaker wire its all there. Theres even a remote. The best part? The pair is only $400.

DT

Caleb is a professional musician, amateur chef and A/V electronics guru. Growing up, Caleb was the guy you would find in the garage tearing apart vintage electronics while other kids rode bikes or played football. His early immersion in consumer electronics has led to countless car stereo, home theater and live audio installations which laid down the foundation for his current work as A/V Editor and reviewer at Digital Trends. Contact him on twitter (@caleb_denison) or via email (cdenison@digitaltrends.com).

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Aperion Audio’s Allaire Bluetooth Speakers nail every feature and sound spectacular

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Metal Gear Rising Revengeance Gameplay (Maxed Out) Samuel "Sam" Boss Fight 720p - Video

Cyborg 009 Finale Manga to End in 5th Volume

Story entered its final arc in August

The wraparound jacket band on the fourth volume of Masato Hayase and Sugar Sat's Cyborg 009 Kanketsu-Hen conclusion God's War manga announced on Friday that the fifth volume will be the series' last. The manga entered its final arc last August, and the fifth volume is scheduled for April. The manga is published on Shogakukan's free online manga website Club Sunday.

Cyborg 009 Kanketsu-Hen conclusion God's War will conclude the Cyborg 009 science-fiction story as a manga series, 15 years after Ishinomori passed away. Club Sunday launched the Cyborg 009 Kanketsu-Hen conclusion God's War arc in April 2012.

Ishinomori's son, actor and filmmaker Jo Onodera (Kamen Rider Kuuga, Shin Kamen Rider), outlined the story based the conceptual notes, rough sketches, and the novel draft that Ishinomori himself left behind. Masato Hayase (Kikaider), a former assistant of Ishinomori, and Sugar Sat have drawn the new manga with Ishinomori's former studio Ishimori Productions.

The first Cyborg 009 manga launched in Shounen Gahousha's Weekly Shonen King magazine in 1964, and then ran for nearly 22 years in Weekly Shonen Sunday, Monthly Shonen Jump, and other magazines. Web Sunday published the first new Cyborg 009 manga in 18 years in 2010. Ishinomori's definitive work also inspired three television series and several films, including's 009 Re:Cyborg by Kenji Kamiyama (Ghost in the Shell: Stand Alone Complex, Eden of the East).

Ishinomori created the original Cyborg 009 manga about nine unsuspecting humans who are transformed into cyborgs by the secret Black Ghost organization. However, the nine cyborgs turn on their masters and protect the rest of humanity from Black Ghost's plans for world war.

Update: Club Sunday will finish its serialization on February 4.

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Cyborg 009 Finale Manga to End in 5th Volume

Understanding ‘Her’: Experts Ponder The Ethics Of Human-AI Relationships

Still, the idea that a super-intelligent bodiless computer would seek romance with a squishy glorified primate seems sort of odd. Would an AI really be able to make a deep emotional connection with a being who thinks millions of times more slowly than it does, and who lives such a radically different existence from its unbounded, silicon and fiber-optic universe? Think of it this way: Could you really fall in love with an amoeba -- even if it was a sensitive, soulful amoeba?

Though it's true AI is still a distant dream, experts are already pondering its potential impact on humanity. Even AI far less sophisticated than Samantha's could engender some serious issues, says Kate Darling, an intellectual property researcher at MITs Media Lab who is also on the forefront of robo-ethics. One-sided love affairs are more likely, at first. A man of Twomblys type might be enthralled by Siri 2.0 -- but shell only ever give polite quips and Google Search results in return.

Were going to be able to fall in love with AI long before it is able to fall in love with us, Darling says.

Issue 1: How Close Are We To AI, Anyway?

"Her" is set in a safely near future -- just hazy and weird enough to seem different, yet not outside a present-day viewers lifespan. And likewise, most predictions -- by experts and amateurs alike -- place the advent of truly self-aware artificial intelligence in the realm of just around the corner, according to Stuart Armstrong, an Oxford University philosopher who works at the Future of Humanity Institute.

Armstrong has been analyzing hundreds of AI predictions (he posted an initial write-up of his findings at the blog Less Wrong), and has found little difference between timelines hazarded by experts and non-experts.

The most common prediction is 15 to 20 years from when the prediction is being made, Armstrong says.

One problem in trying to pin down a timeline for the development of AI is that the goalposts for what constitutes true intelligence keep moving. Its harder and harder to identify the features that you could call uniquely human. Behaviors that we thought could only be accomplished by humanity turn out to be within the reach of computers, and start to look less like intelligence and more like database processing.

No one knows what the problem is, so we have no clear idea how to solve it. Youre talking about an entity that has never existed in human history, Armstrong says. If you told people 10 or 15 years ago that wed have a computer that could win on Jeopardy, theyd say that AI is solved -- and its not.

Issue 2: How Human-Like Would AI Be?

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Understanding 'Her': Experts Ponder The Ethics Of Human-AI Relationships