Freedom Industries, the unfortunately named company whose chemical leak contaminated the water supply for parts of West Virginia, filed for Chapter 11 bankruptcy protection on Friday.
The company voted to pursue bankruptcy protection during a voluntary board meeting on Friday, according to WVNS-TV. The Wall Street Journal reports official company papers from the meeting estimate their debt at roughly $10 million, which does not include the impending clean-up costs and lawsuits, which will no doubt be immense.
Roughly 300,000 people across nine counties near Charleston, the state capital, had to live with a "do not use" tap water ban for five days, give or take — meaning they could not drink, cook, wash or bathe that whole time, even after boiling the water — after thousands of gallons of a chemical used to clean coal leaked into the Elk River. At times, the water coming out of the taps was flammable. The ban was eventually lifted for most of the state, but the water that flowed was a suspicious yellow. Not exactly fit for consumption, even with a Brita filter.
Much of the initial blame was heaped on Freedom Industries Inc. for the chemical leak. The site where the spill happened not been inspected by state authorities since 1991. Of course, the company now faces federal and state investigations, new oversight from federal regulators, and a mile-high stack of lawsuits. The Journal guesses why the company chose the Chapter 11 route:
Bankruptcy offers Freedom a break from having to answer the suits, some of which demand punitive damages. It also opens the door to court-supervised probes into what led to the disaster, and what resources are available to pay any damages.
Well, that move makes enough sense then. As a legal and business decision, it's pretty much a no-brainer. But it will not be so easy for Freedom Industries to get off the hook with federal authorities. "U.S. Attorney Booth Goodwin said the filing does not change anything from his perspective, in terms of a federal investigation," WVNS reports.