Bankruptcy plan for chemical spill company rejected
Freedom Industries ordered to comply with state cleanup orders.
CHARLESTON, W.Va. — A judge has rejected a $6.7 million bankruptcy plan by the company behind a January 2014 chemical spill in West Virginia.
In a federal bankruptcy court filing, Judge Ronald Pearson said Freedom Industries and state environmental regulators haven’t agreed on cleanup terms at the Charleston spill site. Pearson ordered Freedom to comply with state cleanup orders.
Freedom’s plan would have offered spill victims $2.7 million.
The spill contaminated 300,000 residents’ tap water for days. Businesses that couldn’t operate without water, including restaurants, and individuals are seeking compensation.
Professionals hired for the bankruptcy case would have received $2.2 million. Among other distributions, $150,000 would go toward spill site cleanup. Regulators want $1 million.
An insurance settlement would provide $3.2 million. Ex-Freedom officials would contribute $3.1 million, which Pearson said initially seems inadequate.