Freedom Industries filed for Chapter 11 bankruptcy this past Friday

Jan 18, 2014 19:31 GMT  ·  By
Company behind the chemial spill that led to a water ban in West Virginia files for bankruptcy
   Company behind the chemial spill that led to a water ban in West Virginia files for bankruptcy

Media reports say that, this past Friday, the company responsible for a major chemical spill in the state of West Virginia in the United States filed for bankruptcy.

The chemical spill in question is the one that led to a water ban that affected some 300,000 of the state's residents.

It occurred due to a faulty storage tank that contained noteworthy amounts of a chemical compound known as 4-methylcyclohexane methanol (MCHM, for short) that is used during coal washing.

Most recent figures say that, all in all, the storage tank leaked some 7,500 gallons of its content into its surroundings.

As revealed by investigations carried out after massive amounts of MCHM hit Elk River, this storage tank had a hole in it, through which said chemical worked its way into the environment.

By the looks of it, the company filed for Chapter 11 bankruptcy on Friday in an attempt to deal with the lawsuits coming its way in the aftermath of said incident.

Thus, most plaintiffs will now have to battle with other creditors should they seek to obtain a share of the company's assets. Huffington Post reports that, when filing for bankruptcy, Freedom Industries, which is wholly owned by Chemstream Holdings Inc., said that it owed its top 20 creditors some $3.66 million (€2.7 million).

It added that it must also pay over $2.4 million (€1.77 million) in unpaid taxes to the Internal Revenue Service, more commonly known as the IRS.

For the time being, Freedom Industries has chosen not to make any public comments concerning its decision to file for bankruptcy.

The United States' attorney office in West Virginia, on the other hand, was more than willing to share its views on the matter at hand and stressed the fact that, despite the company's choosing to protect itself from lawsuits in this manner, the investigation into the leak will move forward.