Joel R. Glucksman
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For the past couple of weeks, thousands of West Virginians have been unable to use tap water because Freedom Industries spilled chemicals into the Elk River. Just a week after this incident, the company filed for protection under Chapter 11 of the United States bankruptcy law.
Bankruptcy documents revealed that Freedom Industries owes $3.6 million to its top 20 unsecured creditors, according to the West Virginia Gazette. The company has $2.4 million in unpaid taxes owed to the Internal Revenue Service as well, which has led to the agency placing three liens on Freedom’s property. These unpaid taxes go back as far as 2000.
Freedom’s Chapter 11 filing could be a strategic one as it puts any lawsuits that were filed against the company as a result of the chemical leaks on hold. There are currently around 25 lawsuits already filed against Freedom in Kanawha Circuit Court, along with a federal lawsuit. Chapter 11 also allows the company to continue operating while it seeks to reorganize.
The incident that led to this Chapter 11 filing occurred when methylcycolhexane methanol, which is used to treat coal during the preparation process, leaked into a river, according to CNN Money. This caused the 300,000 West Virginia residents across nine counties to lose their water supplies. Not only did this mean that ordinary citizens couldn’t drink the water, many businesses suffered as well.
In total, Freedom Industries has assets and liabilities listed between $1 million and $10 million in the bankruptcy filing. Shortly after its filing, Freedom requested an emergency motion for a “debt-in-possession,” to help them secure a $5 million loan in order to continue operating.
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Freedom Industries Files for Bankruptcy
Author: Joel R. Glucksman
For the past couple of weeks, thousands of West Virginians have been unable to use tap water because Freedom Industries spilled chemicals into the Elk River. Just a week after this incident, the company filed for protection under Chapter 11 of the United States bankruptcy law.
Bankruptcy documents revealed that Freedom Industries owes $3.6 million to its top 20 unsecured creditors, according to the West Virginia Gazette. The company has $2.4 million in unpaid taxes owed to the Internal Revenue Service as well, which has led to the agency placing three liens on Freedom’s property. These unpaid taxes go back as far as 2000.
Freedom’s Chapter 11 filing could be a strategic one as it puts any lawsuits that were filed against the company as a result of the chemical leaks on hold. There are currently around 25 lawsuits already filed against Freedom in Kanawha Circuit Court, along with a federal lawsuit. Chapter 11 also allows the company to continue operating while it seeks to reorganize.
The incident that led to this Chapter 11 filing occurred when methylcycolhexane methanol, which is used to treat coal during the preparation process, leaked into a river, according to CNN Money. This caused the 300,000 West Virginia residents across nine counties to lose their water supplies. Not only did this mean that ordinary citizens couldn’t drink the water, many businesses suffered as well.
In total, Freedom Industries has assets and liabilities listed between $1 million and $10 million in the bankruptcy filing. Shortly after its filing, Freedom requested an emergency motion for a “debt-in-possession,” to help them secure a $5 million loan in order to continue operating.