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Freedom Industries Chapter 11 Filing Reveals Owners' Strategy

Searching for shelter in the face of liability lawsuits, Freedom Industries, the source of the big West Virginia chemical spill, has retreated into federal bankruptcy court with a Chapter 11 filing late Friday. In addition to temporarily freezing litigation against a debtor company, Chapter 11 proceedings allow the bankruptcy judge to sort out whose claims go first. A side benefit is that the process forces troubled corporations to reveal some secrets. Here are my initial findings on Freedom Industries:

The company’s owner made one of the worst-timed acquisitions ever.
We now know who owns Freedom Industries, which was identified on Jan. 9 as the company leaking a hazardous coal-processing chemical into the Elk River in Charleston. The lucky winner is J. Clifford Forrest, a Pennsylvania coal magnate. Forrest acquired Freedom only weeks before the spill that cut off water to 300,000 people and shut down businesses in nine counties. Talk about buyer’s remorse!