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October 2, 2014

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Company blamed for W.Va. spill files for bankruptcy

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Tyler Evert / AP

The West Virginia American Water Co. intake facility on the Elk River is closed following a 4-methylcyclohexane methanol leak from a 48,000-gallon tank at Freedom Industries, a chemical storage facility about a mile upriver in Charleston, W.Va., on Friday, Jan. 10, 2014.

Chemical Spill

City officials help direct traffic through a water distribution site set up at the South Charleston Recreation Center in South Charleston, W.Va., Friday, Jan. 10, 2014, after at least 100,000 customers in nine West Virginia counties were told not to drink, bathe, cook or wash clothes using their tap water because of a chemical spill into the Elk River in Charleston, with Gov. Earl Ray Tomblin declaring a state of emergency Thursday for all those areas. The site opened before 9 a.m. with bottled water and a tanker truck, but  was expected to run out of water about 90 minutes later. Launch slideshow »

CHARLESTON, W.Va. — 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 multiple 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.

Company president Gary Southern signed the paperwork, which lists the company's assets and liabilities as a range — both 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 water was tainted after a chemical used to clean coal leaked from a storage tank and then a containment area at a facility owned by Freedom Industries. The water ran into the Elk River, contaminating the state's largest water system.

The bankruptcy document says the leaky storage tank appears to have been pierced through its base by some sort of object. It also says a current theory for the hole is that a local water line that broke near the Charleston plant could have made the ground beneath the storage tank freeze in the cold days before the spill.

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 terminal that leaked had not been inspected by state officials since 2001, when it was owned by a different company operating under more stringent rules. State officials said Freedom Industries bought the terminal last month.

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