CHARLESTON, W.Va. (Legal Newsline) - Freedom Industries, the company connected to the chemical spill that tainted the water supply in West Virginia filed for Chapter 11 bankruptcy protection on Jan. 17.
On Jan. 29, Freedom's suggestion of bankruptcy was filed in the U.S. District Court for the Southern District of West Virginia at Charleston.
"The United States Bankruptcy Code, Section 362(a) (1), (2), (4), (5) and (6) provide that the filing of a petition operates as a stay of the continuation of any action or proceeding against the debtor, any action or proceeding to recover a claim against the debtor to enforce a judgment obtained that arose before the commencement of the case, to create, perfect or enforce any lien, or to collect or recover a claim that arose before the commencement of the case," the document states.
Gary Southern, the company's president, signed a bankruptcy petition, estimating Freedom's debts at $10 million or less, but the cost of the water contamination disaster is likely to run much higher.
On Jan. 9, thousands of gallons of a chemical called crude MCHM contaminated the water supply for hundreds of thousands of West Virginia's residents.
Bankruptcy offers Freedom a break from having to answer the suits, some of which demand punitive damages. It also opens the door to court-supervised probes into what led to the disaster and what resources are available to pay any damages.
The plaintiffs in lawsuits against Freedom are seeking an injunction ordered the defendants to remove all sources of contamination from the Freedom facility; an injunction ordering WVAW to complete a risk assessment of the pollution risks upstream from its water intake on the Elk River and take the appropriate steps to ameliorate and reduce those risks to an acceptable level to ensure public safety in the future; an injunction ordering Eastman to complete a competent and thorough toxicological analysis of the risks to human health from 4-MCHM and to make changes to its published MSDS sheets accordingly; an order certifying this action to proceed as a class action; compensatory and punitive damages; and an order establishing a medical monitoring program.
The plaintiffs are being represented by Kevin W. Thompson and David R. Barney Jr. of Thompson Barney; Van Bunch of Bonnett Fairbourn Friedman & Balint PC in Phoenix; and P. Rodney Jackson of the Law Offices of Rod Jackson.
Freedom is being represented by Stephen L. Thompson and J. Nicholas Barth of Barth & Thompson.
The case has been assigned to District Judge John T. Copenhaver Jr.
West Virginia Attorney General Patrick Morrisey is also investigating the chemical spill, along with U.S. Attorney for the Southern District of West Virginia Booth Goodwin.
At least 20 class action lawsuits have also been filed in Kanawha Circuit Court because of the water contamination.
U.S. District Court for the Southern District of West Virginia at Charleston case number: 2:14-cv-01374
From Legal Newsline: Kyla Asbury can be reached at email@example.com.