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Company responsible for W.Va. chemical leak files for bankruptcy

Jan. 17, 2014 at 3:39 PM   |   Comments

CHARLESTON, W.Va., Jan. 17 (UPI) -- Freedom Industries, responsible for the chemical leak that left portions of West Virginia without water for days, filed for Chapter 11 bankruptcy Friday.

The filing indicated the company's assets and liabilities as "unknown," the Charleston Gazette reported. Chemstream Holdings Inc. of Stoystown, Pa., was listed as the owner.

The documents indicated Freedom owes $3.66 million to its top 20 unsecured creditors, led by $648,221 owed to Atlanta-based FloMin Coal Inc.

An estimated 7,500 gallons of the chemical 4-methylcylohexane methane, used in the coal-cleaning process, leaked from a storage tank at Freedom Industries and into the Elk River in Charleston Jan. 9. More than 300,000 residents in nine West Virginia counties were advised not to use their tap water because of concerns about possible contamination. On Monday, the West Virginia American Water customers began flushing home plumbing systems on a zone-by-zone basis so they could begin using their tap water.

Eastman Chemical, maker of the chemical that spilled into the Elk, is owed $127,474, the bankruptcy documents indicated.

Chapter 11 bankruptcy protection allows a company to reorganize and maintain operations.

Freedom Industries owes more than $2.4 million in unpaid taxes to the Internal Revenue Service, which filed at least three liens against Freedom, demanding payment, the Gazette said. The West Virginia Bureau of Employment Programs placed at least two liens on Freedom's property for roughly $4,000 in unpaid unemployment compensation insurance.

Eastman, Freedom Industries and West Virginia American Water were named in a federal lawsuit filed this week. Freedom also was named in about 25 lawsuits filed in Kanawha County Circuit Court.

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