All In with Chris Hayes, 1/17/14, 9:23 PM ET

Truth behind Freedom Industries bankruptcy

The company at the center of the West Virginia water crisis appears to be dodging lawsuits and creditors. Chris Hayes has more.

Freedom Industries files for bankruptcy protection

Updated

Freedom Industries, the company behind last week’s chemical spill in West Virginia, filed for bankruptcy on Friday.

The voluntary petition, obtained and posted by local news station WSAZ, lists $1 to $10 million in assets and $1 to $10 million in liabilities. 

The filing also describes the danger that the “personal property” owned by Freedom poses to the health and safety of the public, and acknowledges the Jan. 9 “incident” is currently under investigation by multiple agencies:

“It is presently hypothesized that a local water line break adjacent to the Charleston Facility may have or contributed to the ground beneath a storage tank at the Charleston Facility to freeze in the extraordinary frigid temperatures in the days immediately preceding the Incident. The Debtor and investigative authorities have taken note of the hole in the affected storage tank that appears to have come from an object piercing upwards through the base of the affected storage tank. Investigations by multiple agencies are ongoing with full cooperation by the Debtor.”

More than two dozen lawsuits have been filed against Freedom Industries since the company’s storage tanks leaked thousands of gallons of 4-Methylcyclohexanemethanol (MCHM) into the Elk River, leaving as many as 300,000 residents without access to clean water for days. Local businesses and schools were forced to shut down as well.

Filing for bankruptcy would give Freedom Industries a reprieve from having to answer the lawsuits.

According to the bankruptcy filing, Freedom Industries is solely owned by Chemstream Holdings Inc. The Washington Post and The Charleston Gazette reported that Chemstream Holdings is owned by J. Clifford Forrest.  

The  company enabling Freedom Industries to file for bankruptcy by lending it money to restructure –  with the potential upside of acquiring the company’s assets if it does go bankrupt – is called Mountaineer Funding.

Mountaineer Funding was incorporated Friday, according to a document posted to the state’s website. One of the company’s two officers listed on the document is J. Clifford Forest – the same name reported by The Washington Post and The Charleston Gazette as the owner of Freedom Industries.

On Friday, West Virginia Sen. Jay Rockefeller introduced two bills that would force the responsible parties for a chemical spill to pay for the cleanup. “Our families and businesses have suffered tremendously and have borne significant costs already. This bill corrects a glaring hole in our law that leaves residents vulnerable to shouldering the cleanup costs associated with a non-hazardous chemical spill,” Rockefeller said in a statement.

Erin Delmore contributed to this report.

West Virginia

Freedom Industries files for bankruptcy protection

Updated