Company blamed for West Virginia chemical spill files for bankruptcy amid court claims
Freedom Industries facing lawsuits and investigations after spill that left 300,000 without water
Saturday 18 January 2014
The company blamed for a chemical spill that left 300,000 people without water in the US has filed for bankruptcy.
Freedom Industries filed documents with the US Bankruptcy Court on Friday detailing at least 200 creditors and debts of more than $3.6m.
The company was shut down by the government after the leak and is now facing 31 lawsuits as well as state and federal investigations into how up to 19,0000litres of a toxic chemical leaked into the Elk River in West Virginia on 9 January.
Bankruptcy proceedings have frozen the cases against Freedom Industries, including one brought by a group of small businesses who are considering petitioning the court to proceed.
Other parties including the West Virginia American Water Company and Eastman Chemical can still be sued.
Mark E. Freedlander, an attorney with the law firm representing Freedom Industries, said in a statement Friday that “the petition and related pleadings speak for themselves".
More than 300,000 residents around Charleston were told not to use the contaminated water, forcing businesses and schools to close as shops sold out of supplies.
The restrictions have since been lifted but several people were hospitalised for suspected effects of exposure to 4-methylcyclohexane methanol - an industrial chemical used to clean coal.
It leaked from a storage tank owned by Freedom Industries, which had not been inspected by state officials since 2001, when it was owned by a different company.
According to the bankruptcy document, the tank appeared to be pierced through its base.
Speaking at a media conference in Charleston after the leak, Gary Southern, the president of Freedom Industries, apologised for disruption caused by the “extremely unfortunate and unanticipated” incident.
Officials “had to convince” Freedom Industries staff that they needed to deal with the problem, according to Earl Ray Tomblin, the governor of West Virginia, and the dangerous leak was only discovered when a member of the public smelt a strange odour.
Additional reporting by AP
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