With available funds dwindling and millions in claims pending over the January 2014 Elk River chemical leak, the Freedom Industries bankruptcy case appears to be at a crossroads. <\/p>\n
No clear plan for resolving the case is in sight, prompting U.S. Bankruptcy Judge Ronald Pearson to schedule a status conference early next month to ask various interested parties for options. <\/p>\n
Pearson called the conference, set for 10 a.m. March 3, to ask for input with respect to how this case should be administered to conclusion utilizing the limited resources available to obtain the best results for the public and parties in interest, the judge said in a three-page order entered on Feb. 6. The conference will be held in the bankruptcy courtroom at the Robert C. Byrd U.S. District Courthouse, and is open to the public, the judges order said. <\/p>\n
In the ruling, Pearson noted that more than $200 million in claims have been filed against Freedom Industries, with most of that accounted for by 3,800 damage claims filed by victims of the Jan. 9, 2014, leak that contaminated the regional drinking water supply. <\/p>\n
But, the judge noted, Freedoms most recent financial report to the court showed payables of $3.2 million for legal and environmental consultant fees that have not yet been approved by the court. <\/p>\n
Only $1.5 million in cash remains from a total of almost $16 million in assets listed by the debtor at filing of its bankruptcy petition, Pearson said. <\/p>\n
The judge said these numbers raise questions about what will be proposed by Freedoms current management led by a chief restructuring officer approved by the court with respect to the rights to the $3 million insurance policy limits the debtor is attempting to collect as a result of the spill incident. <\/p>\n
While Freedom appeared to have worked out a deal with AIG Specialty Insurance Co., Pearson noted that former Freedom President Gary Southern facing indictment on Clean Water Act violation and bankruptcy fraud charges has filed a new challenge to the insurance deal. Lawyers for some residents had hoped that the $3.2 million insurance payment could be used for a class-action settlement funding projects like water testing or studies of leak-related health effects. <\/p>\n
The court is not comfortable with moving forward with a decision about how this case should be administered or what might be done with the proposed $3.2 million of insurance proceeds without greater input from spill claimants who hold 95 percent of the claims in the case, Pearson said in a second order, made public Feb. 9. <\/p>\n
Because no class-action case against Freedom has yet been approved in U.S. District Court or in the bankruptcy case, Pearson asked bankruptcy case claims agent Jim Lane and Tony Majestro, a lawyer for some residents, to meet with lawyers for all leak victims to receive information from spill claimants as to the administration of this case and what rights they assert in the case. <\/p>\n
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Freedom bankruptcy case at crossroads<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" With available funds dwindling and millions in claims pending over the January 2014 Elk River chemical leak, the Freedom Industries bankruptcy case appears to be at a crossroads. Continue reading