Freedom Industries, the chemical company behind the toxic leak that
tainted West Virginia's Elk River and forced 300,000 state residents and
businesses to go without water for several days, filed for bankruptcy
The Chapter 11 bankruptcy filing will allow the
company - facing at least two dozen class-action lawsuits and several
state and federal probes - to reorganize and continue operating under
Freedom, which was ordered shut down last week by
state officials, declined comment Friday. A 35,000 gallon storage tank
operated by the company leaked thousands of gallons of the coal
processing chemical 4-methylcyclohexane methanol (MCHM), into the Elk
River Jan. 9, affecting residences, businesses and schools in nine
counties. MCHM can cause skin irritation, vomiting and diarrhea.
Freedom owes $3.66 million to its top unsecured creditors, according to bankruptcy documents, Charleston Gazette reported.
company has been in hunker-down mode since last Friday, when company
co-founder Gary Southern gave a brief press conference, dodging
questions about the company's monitoring and preventive measures in the
The company, initially launched
in the mid-1980s, formed under a new entity in December when it merged
with Etowah River Terminal, which operated the site, a former oil and
gas terminal owned by Pennzoil-Quaker State. Other Freedom partners
include chemical processor Poca Blending and Crete Technologies, a
Delaware limited partnership, according to reports by the Charleston Gazette and the Wall Street Journal.
The companies share many of the same executives, while Southern has
ties to five Florida-based mining and chemical companies, the Journal reported.
An inch-wide hole in the storage tank caused the leak.
bankruptcy filing states that while "facts surrounding the incident are
subject to pending investigation by Freedom and various regulatory and
other government authorities," the company says that a local water line
break next to the storage tanks may have caused the ground underneath to
freeze, causing a pierce in the bottom of the tank that leaked.
Freedom said it owes $3.66 million to its top 20 unsecured creditors, according to bankruptcy documents.
the ban on using public water supplies has been lifted for most of the
counties affected by the spill, some residents have been advices not to
drink the water and others have been told to boil water as a precaution.
Bottled water is still being distributed in several areas. The Centers
for Disease Control and Prevention also recommends that pregnant women
consume bottled water.