Bankruptcy Judge Rejects Objection, Approves New Lawsuit Filing
Our attorneys at Mani Ellis & Layne, PLLC currently represent over 100 businesses that are involved in litigation for the Elk River chemical spill that occurred in January. U.S. Bankruptcy Judge Ronald Pearson has rejected West Virginia American Water's objection to the new $3 million lawsuit proposed by attorneys from Freedom Industries and Kanawha Valley residents.
The lawsuit would provide for projects benefiting Kanawha Valley residents who were affected by the chemical spill at Elk River that occurred at a Freedom Industries facility in January. Judge Pearson issued an order on September 7th voicing his concern that Freedom Industries may consider abandoning the cleanup of chemical contamination at Elk River before it would be completed.
After Freedom Industries filed for bankruptcy, an automatic "stay" on litigation prevented lawsuits and other claims from being taken against the company. In order for the settlement proposed by Freedom Industries and Kanawha Valley residents to be officiated, the bankruptcy court must grant permission to suspend the "stay" on litigation. In August, attorneys from West Virginia American Water filed an objection against the $3 million settlement proposal, arguing that it was too soon to consider a proposal when Freedom Industries' insurance company had not yet finalized their own settlement.
New Hearings Scheduled to Discuss the Issues
West Virginia American Water has filed a $1.1 million claim against Freedom Industries to recover funds, and also seeks to hold Freedom Industries liable for potential damages in other lawsuits that lay partial blame on West Virginia American Water for exposure to contaminated water. In addition to the objection against the $3 million settlement, West Virginia American Water has also filed objections against two bankruptcy claims of more than $100 million each, which were filed against Freedom Industries on behalf of residents and businesses harmed by the chemical spill.
In Pearson's ruling that rejected West Virginia American Water's objection, he considered the $3 million lawsuit as being "reasonable means and costs" for treatment of the incident claims. A hearing to discuss the issues of the Elk River site clean-up is set to be held on September 23rd. An additional hearing to consider the $3 million settlement proposal may be scheduled after the site clean-up hearing. Pearson rescheduled the original hearing after lawyers from Freedom Industries asked the judge to call off the proposal hearing until the clean-up issues were discussed.