Source: Dow Jones News Service, April 16, 2014
Posted on: http://envfpn.advisen.com
The company behind the chemical spill that tainted the water supply of 300,000 people in West Virginia spent $1.9 million on attorneys and advisers in the first months of its bankruptcy case.
Freedom Industries Inc.’s lead bankruptcy law firm, McGuireWoods LLP, billed top dollar, according to court papers filed Tuesday. The law firm charged nearly $746,000 in fees and expenses for work performed between Jan. 17, when Freedom filed for bankruptcy, and the end of March.
Two specialist law firms, one for environmental matters and one for litigation, billed a combined $535,000 in fees and expenses for work during the same timeframe.
Less than 5% of the bills from bankruptcy professionals come from lawyers representing Freedom’s committee of unsecured creditors, whose members include people claiming injury or other damages from the disastrous Jan. 9 chemical spill from a Freedom-owned tank farm.
Chemical contamination resulted in a ban on use of tap water in a nine-county swath of West Virginia and touched off a wave of lawsuits that drove the company into bankruptcy. Freedom is cleaning up under the eye of regulators and is shutting down under the supervision of a judge.
Besides McGuireWoods, the other law firms on Freedom’s tab include local and conflicts counsel Barth & Thompson, special environmental counsel Babst, Calland, Clements & Zomnir PC and special litigation counsel Pietragallo Gordon Alfano Bosick & Raspanti LLP. Freedom is also paying financial adviser MorrisAnderson and Civil and Environmental Consultants Inc. (You can see each firm’s payment request by clicking on the firm’s name.)
Additionally, Freedom foots the bill for lawyers for the committee of unsecured creditors—Frost Brown Todd, which court papers show is seeking payment of more than $90,000 in fees and nearly $4,000 in expenses for work performed between Feb. 13 and March 31.
Cash is tight in Freedom’s bankruptcy case. Valued at $20 million when it was sold in December, the company is now running on money it’s collecting from old bills and what it is able to raise as it sells off its equipment. Exactly how fast the cash is running out has been hidden by a court order allowing Freedom to keep its periodic budgets under seal.
The fees are all subject to the approval of the U.S. Bankruptcy Court in Charleston, W.Va., where Freedom sought Chapter 11 protection.