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Firm tied to spill enters bankruptcy

– The company blamed for a chemical spill that left 300,000 West Virginians without safe drinking water filed for bankruptcy Friday.

Freedom Industries Inc., facing at least 31 lawsuits and state and federal investigations after the Jan. 9 spill, filed a Chapter 11 petition with the U.S. Bankruptcy Court in the Southern District of West Virginia.

The paperwork lists both the company’s assets and liabilities as being between $1 million and $10 million. It says the company has at least 200 creditors and owes its top 20 creditors $3.66 million.

The bankruptcy proceedings freeze the lawsuits against Freedom Industries, said Charleston attorney Anthony Majestro, who is representing several small businesses that sued the company. Majestro said his clients are weighing an option to petition the court to proceed in hopes of collecting on Freedom’s insurance policy.

The bankruptcy filing doesn’t stall lawsuits against other parties targeted in the spill, said Washington, D.C., attorney H. Jason Gold. Some of the 31 lawsuits in Kanawha County Circuit Court also name West Virginia American Water Co. and Eastman Chemical, the producer of the coal-cleaning chemical that spilled.

Water was tainted after a chemical used to clean coal leaked from a storage tank owned by Freedom Industries. It ran into the Elk River, contaminating the state’s largest water system.

The bankruptcy document says the leaky tank appears to have been pierced through its base by some sort of object. It says a water line that broke near the Charleston plant could have made the ground beneath the tank freeze in the cold days before the spill, causing the damage.

After the spill, residents in a nine-county area around the state capital of Charleston were told not to use the water for anything other than flushing toilets. Some businesses and schools were forced to close for several days. The water restrictions have since been lifted for most residents.

The spill has become the focal point of the state’s 60-day lawmaking session, which started the day before last Thursday’s spill.

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