Newspaper article Charleston Gazette Mail

Freedom Bankruptcy Case Nears End ; Judge Says Final Decision Will Be Made Next Week

Newspaper article Charleston Gazette Mail

Freedom Bankruptcy Case Nears End ; Judge Says Final Decision Will Be Made Next Week

Article excerpt

After more than a year and a half of wrangling and negotiating among lawyers, environmental regulators and court officials, Freedom Industries bankruptcy case is almost settled. U.S. Bankruptcy Judge Ronald Pearson said Friday that there was great merit to the proposed settlement and that he would make a final decision very, very early next week. It will have to be early in the week. Fridays hearing was likely the last of Pearsons career. He retires from the bench, after 32 years, on Thursday. Freedom Industries filed for bankruptcy in January 2014, just one week after it leaked 10,000 gallons of coal-cleaning chemicals into the Elk River, contaminating the drinking water of 300,000 people.

For more than 20 months, Freedoms lawyers have been in negotiations with lawyers for local residents, the state Department of Environmental Protection, West Virginia American Water and other parties.

The proposed settlement aims to compensate (as much as possible) victims of the chemical leak, while also providing funds to finish cleaning up the contaminated site on the banks of the Elk. It also releases Freedoms former owners and directors from liability and the threat of lawsuits related to the bankrupt company.

Freedoms proposed bankruptcy plan was submitted Aug. 12 and received overwhelming support from the people involved in negotiating it. Among the small differences between the proposed plan and the one that will likely be approved next week is a stipulation allowing the bankruptcy estate to donate, potentially to the DEP, the old Freedom site if they are unable to find a buyer following cleanup.

In the end, Freedoms bankrupt estate has a little more than $6 million to distribute.

The settlement, if approved, will provide a little more than $2 million to people and businesses affected by the tainted water.

Nearly $600,000 will go to the IRS for unpaid federal taxes.

The DEP and environmental cleanup firms will get $1.4 million to continue cleaning up the contaminated leak site. Thats in addition to another $1.1 million for environmental remediation approved under a separate settlement between the DEP and Freedoms owner, a company called Chemstream Holdings.

Whatever needs to be done at the site is going to be done at the site, said Mark Freedlander, Freedoms lead bankruptcy lawyer. Any funds left over after cleanup is complete will go toward reimbursing leak victims.

About $1.2 million will go toward fees for lawyers and financial management firms involved in the case.

About $350,000 will go to general unsecured claims, largely people and companies that Freedom owed money to before the leak.

There are two separate classes of spill victims, and they will be drawing from separate pools of money.

People who claimed losses from the spill that were less than $3,000 will collect payments from a total of $500,000. …

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