Freedom Industries Files Chapter 11 Bankruptcy

Freedom Bankruptcy Filing

CHARLESTON, W.Va. (WSAZ) -- The company related to the chemical leak that caused hundreds of thousands of people in West Virginia to go without water filed for bankruptcy Friday.

According to court records, Freedom Industries Inc., located along Barlow Drive, filed for Chapter 11 bankruptcy.

West Virginia American Water customers in parts of Cabell, Boone, Putnam, Kanawha, Lincoln, Logan, Clay, Jackson and Roane counties were put under a "do not use" ban on January 9 after a chemical at Freedom Industries in Charleston leaked into the Elk River.

In the federal documents, Freedom Industries had to describe the nature and location of the dangerous condition.

Freedom Industries writes "facts surrounding the incident are subject to pending investigation by Freedom and various regulatory and other government authorities."

The company goes on to say "it is presently hypothesized that a local water line break adjacent to the Charleston facility may have or contributed to the ground beneath a storage tank at the Charleston facility to freeze in the extraordinary frigid temperatures in the days immediately preceding the incident. The Debtor and investigative authorities have taken note of the hole in the affected storage tank that appears to have come from an object piercing upwards through the base of the affected storage tank. Investigations by multiple agencies are ongoing with full cooperation by the Debtor."

Later Friday, a state DEP spokesman said a company's bankruptcy status does not absolve it of its environmental remediation obligations.

The substance released from the tank has been referred to as methylcyclohexane methanol or MCHM. MCHM is used by customers of Freedom to treat coal and reduce the amount of ash during the coal preparation process, according to the documents.

In the document, Freedom Industries said it contacted the water company.

According to investigators, the smell from the chemical was reported by neighbors about 8 a.m. Employees at Freedom Industries noticed the leak about 10:30 a.m. A crew from the Department of Environmental Protection says it arrived on the scene about 11:05 a.m., but it wasn't until after 12 p.m. Freedom Industries reported the leak.

According to bankruptcy documents, Freedom Industries owes unsecured creditors more than $3.6M.

Under bankruptcy code, Chapter 11 permits reorganization under the bankruptcy laws of the United States.

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