Freedom Industries Winding Down Operations

CHARLESTON, W.Va. (WSAZ) -- A bankruptcy court hearing involving Freedom Industries Friday revealed a change of course for the company and what will happen as the investigation into the chemical spill continues.

Attorneys representing Freedom Industries said the company's problems far outweigh what it can handle and the business will eventually shut down.

Freedom Industries' CEO, Gary Southern, was not in the courtroom Friday.

Attorney Mark Freedlander represented Freedom Industries.

Freedlander said the company will remain in Chapter 11 bankruptcy.

He said after recognizing the costs, business appears to be unpractical under the circumstances.

Freedlander also said Freedom Industries' leftover inventory is being sold to existing customers and depleted.

Attorneys said the company plans to transition those customers to competitors.

Freedlander said the company hopes current employees will be able to find new positions with competitors or vendors that work with Freedom Industries.

According to Freedlander, employees and customers were made aware of the situation Friday morning.

In a press release issued Friday, Southern said, "Under the circumstances, workforce reductions are unfortunately inevitable, but we will do everything in our power to help our employees find new jobs with alternate suppliers who will serve former Freedom customers."

In court, members of the Unsecured Credit Committee and attorneys representing Freedom Industries agreed to a protective order and second-interim financing order to keep the company afloat during the process.

The protective order requires evidence to be protected, on-going water testing, and investigators to be allowed access to the Barlow Drive site. It also clarifies actions the company is taking to ensure environmental compliance.

The second-interim financing order does not allow the company to use the $3 million loan it borrowed earlier in the crisis to continue operating. The order does allow the use of money generated by sales.

Attorneys said the $3 million is sitting in an estate account.

Officials from West Virginia Funding, LLC., the company that made the loan, said they would be open to allowing the use of $1 million for cleanup at the site.

During Friday's hearing, the judge approved both orders.

Anthony Majestro, an attorney representing several businesses affected by crisis said Friday's hearing was, "Good in the sense that the bankruptcy is proceeding in an orderly fashion and resources aren't being used unnecessarily."

The committee said they will conduct full investigations in the case, though the judge said he expects adequate cause for those investigations because of the cost.

Freedom Industries' attorneys also discussed the hiring of experts for the site, including a hydrologist and metal structure engineer for their own investigation.

Attorneys said the protective order approved Friday ends March 18.

The Department of Environmental Protection set a deadline of March 15 for materials at the site to be removed and the decommission of the facility.

Officials from West Virginia American Water, West Virginia Funding, LLC., Mardis Gras Casino, the State Tax Department and the Department of Environmental Protection were in the courtroom at the time.

Gary Southern is expected to be in court next Tuesday for a meeting of the creditors.

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