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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
The petition and related pleadings speak for themselves, Mark Freedlander, the companys bankruptcy lawyer, said in a statement, declining to comment further. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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Freedom Industries Files for Bankruptcy in West Virginia<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" 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. Continue reading