Judge Tells Freedom Industries to Keep West Virginians Informed

By Dawn McCarty | June 27, 2014

Freedom Industries Inc., the chemical company that filed for bankruptcy after a leaky storage tank tainted the water supply in West Virginia, was ordered to do a better job of keeping the public informed.

In a court filing yesterday, U.S. Bankruptcy Judge Ronald Pearson in Charleston, West Virginia, also said that Chief Restructuring Officer Mark Welch didn’t attend a June 10 hearing and told him to show up in the future.

On Jan. 9, West Virginia officials discovered the leak from a tank of 4-methylcyclohexane methanol, a chemical used in coal processing, which contaminated the water supply of about 300,000 people and sent more than 100 to the hospital. Charleston-based Freedom Industries filed for bankruptcy on Jan. 17.

“The court feels a responsibility to ensure the public that the environmental issues are being dealt with responsibly and that the bankruptcy process continue with full recognition and compliance with laws that protect the environment and public safety,” the judge said in yesterday’s order.

Welch didn’t immediately respond to a voice-mail message seeking comment on the order. The company didn’t immediately respond to an e-mail requesting comment.

The company has said bad press has damaged parts of its business not involved in the spill. In May, it announced the sale of a blending plant to Lexycon LLC for $575,000, saying “extensive media coverage and intense government scrutiny by governmental enforcement agencies” after the leak hurt the blending business.

While “much was improved” after Welch came on the scene, the executive is expected to be at all hearings unless otherwise excused, the judge said. He should also hold press conferences or “issue information bulletins” to keep the public aware of “conditions that require their caution and consideration,” the judge said.

Freedom Industries’ bankruptcy filings listed assets of $16.1 million and debt of $6.8 million, not including claims resulting from the chemical spill.

The case is In re Freedom Industries Inc., 14-bk-20017, U.S. Bankruptcy Court, Southern District of West Virginia (Charleston).

With assistance from Phil Milford in Wilmington, Delaware.

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