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(BusinessWeek)   Owner of Freedom Industries bought the company weeks before the West Virginia chemical spill. Naturally, he's blaming the polar vortex and setting up shell companies to lend money to himself   (businessweek.com) divider line 96
    More: Fail, chemical accident, West Virginia, VF Funding, shell companies, United States bankruptcy court, unsecured creditor  
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6251 clicks; posted to Main » on 20 Jan 2014 at 10:40 AM (32 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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ZAZ [TotalFark]
2014-01-20 09:02:18 AM
It seems the idea is that water turning to ice expanded, pushing that mystery "object" through the floor of the tank. Hard to say if the court will buy that. Shouldn't steel tanks containing dangerous chemicals be able to withstand the consequences of winter weather?

In some circumstances courts impose strict liability for consequences of release of dangerous chemicals. The reasoning is, if you engage in "inherently dangerous" activity the public interest is served by putting all the responsibility on you to keep it safe.

Among the creditors is Eastman Chemical (EMN), the Kingsport (Tenn.)-based manufacturer that sold Freedom MCHM, the chemical that escaped into the Elk and from there into the regional water system. Eastman has much bigger concerns, however, than recovering the $127,474.84 Freedom owes it. Plaintiffs in liability suits have also named Eastman as a defendant, alleging that the company failed to warn adequately of MCHM's hazards.

This area of West Virginia law ("sophisticated user" doctrine) is unsettled, giving the state Supreme Court an opportunity to clarify the law by determining whether to blame Pennsylvania, Tennessee, or locals.
 
2014-01-20 09:18:14 AM
This guy should drown in those chemicals he's allowed to spill.
That would be the perfect karmic death.
 
2014-01-20 10:18:30 AM
In a way, this could be seen as exculpatory.  There's no way he could have discovered any and all problems within a few weeks.  On the other hand, if there's bank money in this, they're going to be pissed that due diligence wasn't taken.  In the end, hopefully this leads to some better regulations and oversight.
 
2014-01-20 10:31:58 AM
It seems the idea is that water turning to ice expanded, pushing that mystery "object" through the floor of the tank. Hard to say if the court will buy that. Shouldn't steel tanks containing dangerous chemicals be able to withstand the consequences of winter weather?

It should also be fairly easy to examine the bottom of the tank and see if something's been forced up through it from below.
 
2014-01-20 10:42:07 AM
Why would we dare to bother such a noble job creator?
 
2014-01-20 10:45:01 AM
Freedom Industries. Chemstream Holdings. Rosebud Mining Co?

This is all an elaborate prank, right?
 
2014-01-20 10:45:06 AM

Bondith: It seems the idea is that water turning to ice expanded, pushing that mystery "object" through the floor of the tank. Hard to say if the court will buy that. Shouldn't steel tanks containing dangerous chemicals be able to withstand the consequences of winter weather?

It should also be fairly easy to examine the bottom of the tank and see if something's been forced up through it from below.


Weren't these tanks buried?

Even if they weren't its not like people go and thoroughly check their tanks every day.   That said they should have had a system in place to quickly identify a leak (like a float) and a way to remedy it (like a backup tank they could have pumped into).
 
2014-01-20 10:46:03 AM
How long until this guy is shredded by Fox for being an America-hating Global Warming Apologist?
 
2014-01-20 10:53:55 AM
I've seen something similar in the hotel business.  Corporation owns an expensive resort property.   They want to sell it for a quick proffitt.  First thing they do, once it goes up on sale, is stop paying for expensive upkeep, and focus on less expensive efforts that look good.  Doesn't matter if the walls are rotting away, just throw a coat of paint over them, and let the next guy worry about it.  What the buyer can't see, can't hurt him, and what you save on fixing all those thousands of little hidden issues, goes into extra profit.

New guy comes in, and even then, he tries to run things like the old guy was running, not adding any money into maintenance, until balconies start falling off the side of the building, and electrical systems start going out.

I am now imagining that same thing, but with toxic sludge.
 
2014-01-20 10:54:15 AM
All of these arguments are moot. The ultimate issue here was the massive fissure in the overflow area leading to the river. If the overflow was fixed, none of us would be having this conversation. There is no excuse for it being in disrepair. I don't care if he bought the plant the day before -- having it fixed should have been a condition of purchase.

/that's sorta the freakin' point of safe guards
//the politicians in and around Charleston already have their lawyers on alert -- someone is gonna lose a lot of money and make a legal team very, very wealthy
///screwing the citizens for a second time
 
2014-01-20 10:55:24 AM
Sounds like someone was a little lax in their pre-acquisition due dilligence.
 
2014-01-20 10:56:34 AM

Barry Lyndon's Annuity Cheque: Freedom Industries. Chemstream Holdings. Rosebud Mining Co?

This is all an elaborate prank, right?


Yep, and it's being played on all of us, ultimately.
 
2014-01-20 10:57:04 AM
Know that scene from Men In Black where Will Smith is making up an "excuse" like what K used earlier about swamp gas off Venus? That's what this reads like.
 
2014-01-20 10:57:47 AM

SilentStrider: This guy should drown in those chemicals he's allowed to spill.
That would be the perfect karmic death.


That's how supervillans are fromed.
 
2014-01-20 10:58:08 AM
I'm going wwwwaaaaaaayyyyyyyy out on a limb here......
We The People will pay for this
We The People will make sure this 'job creator' gets to keep his millions
Private Profit, Public Risk


/the american way
 
2014-01-20 10:58:52 AM
It seems the idea is that water turning to ice expanded, pushing that mystery "object" through the floor of the tank. Hard to say if the court will buy that. Shouldn't steel tanks containing dangerous chemicals be able to withstand the consequences of winter weather?


Don't you see? It is totally natures fault. If the natural world did not want all those chemicals dumped down its streams and into its ground water, it should have thought of that before it went freezing and pushing projectiles with its expanding ice. Doesn't Mother Nature know anything about chemical storage?
 
2014-01-20 10:59:55 AM

Necronic: Bondith: It seems the idea is that water turning to ice expanded, pushing that mystery "object" through the floor of the tank. Hard to say if the court will buy that. Shouldn't steel tanks containing dangerous chemicals be able to withstand the consequences of winter weather?

It should also be fairly easy to examine the bottom of the tank and see if something's been forced up through it from below.

Weren't these tanks buried?

Even if they weren't its not like people go and thoroughly check their tanks every day.   That said they should have had a system in place to quickly identify a leak (like a float) and a way to remedy it (like a backup tank they could have pumped into).


Leak detection systems for bulk chemical storage systems certainly do exist (flowmeters on intake and output pipes, float from which current tank level can be gauged, regularly feed their data to a computer- if amount pumped in diverges from amount pumped out plus current level, you got a leak), but of course they cost money to install and monitor.
 
2014-01-20 11:10:40 AM
That area of the country has been a chemical dumping ground for over 100 years. It's where they discovered anti-freeze because it melted ice when they dumped it in the river. This incident is one in a long history of fark ups.
http://www.wvculture.org/history/wvhs1821.pdf
 
2014-01-20 11:11:17 AM
We need to start executing corporate executive. It will only take one or two for the rest to get the message.
 
2014-01-20 11:17:23 AM
static1.wikia.nocookie.net

Was it in the disclosures?
 
2014-01-20 11:17:50 AM
Reminds me of the Simpsons episode when Mr.Burns crossed the Germans.
 
2014-01-20 11:18:29 AM

SisterMaryElephant: I'm going wwwwaaaaaaayyyyyyyy out on a limb here......
We The People will pay for this
We The People will make sure this 'job creator' gets to keep his millions
Private Profit, Public Risk


/the american way


If we are really lucky, the company will be fined a couple million dollars.  The company will then file for bankruptcy and not pay a penny, while the owner and shareholders are legally protected from any legal or financial culpability.

Go USA!
 
2014-01-20 11:18:54 AM
Freedom Patriot Industries.
 
2014-01-20 11:19:49 AM

Chameleon: The company will then file for bankruptcy and not pay a penny


Too late...
 
2014-01-20 11:19:54 AM
Came for Ha Ha, leaving disappoint.
i.imgur.com
 
2014-01-20 11:20:54 AM
OF course, if we regulated to stop crap like this, the residents of WV would complain about evil big gubmint killing their jerbs.
 
2014-01-20 11:21:12 AM
if a company sells a gas station, it has to have all sorts of EPA studies done to see if there is leakage before it can be sold, to establish liability on the seller or the buyer in the case of future leakage.  Also the leaks, if found, have to be fixed and the seller has to pay for remediation.

I would think that selling a company that owns big tanks of MCHM would have to jump through similar hoops before the company being sold.  So somebody should have known that the tanks were leaking.  The big arctic vortex by itself couldn't have caused the leak, but it could have busted open a small leak that had been forming during 20+ years of not being inspected.
 
2014-01-20 11:22:29 AM
The next big legal question.
What kind of insurance coverage do these companies have?


They avoided inspections for twenty years without any consequences, so I'm guessing they went with the cheapest insurance possible..
 
2014-01-20 11:25:45 AM

Barry Lyndon's Annuity Cheque: Freedom Industries. Chemstream Holdings. Rosebud Mining Co?

This is all an elaborate prank, right?


I almost did an honest-to-Omaha spit-take when I read this name... it's almost like they were planning for the stuff to wind up in the river.

What really scares me about all this is that no one seems to have any idea what MCHM's potential hazards are. I haven't heard a single reference to am MSDS for this stuff since the story (and the storage) broke.
 
2014-01-20 11:27:18 AM
Either Clifford really got caught holding the bag, or he is ready to retire and is taking one for the team.

This sounds like an elaborate shell game to protect the larger corporations assets.

Freedom Inc. was purchased 2 weeks before the leak was discovered?

They only have 3 million in assets?

Filed Chapter 11 immediately?

Another set of shell companies incorporated almost overnight, to provide financial backing with plausible deniability?

Something stinks, and it doesnt smell of licorice....
 
2014-01-20 11:27:44 AM

SisterMaryElephant: I'm going wwwwaaaaaaayyyyyyyy out on a limb here......
We The People will pay for this
We The People will make sure this 'job creator' gets to keep his millions
Private Profit, Public Risk


/the american way


Well if we didn't, that would be  socialism.

/snark
 
2014-01-20 11:28:05 AM
Subby, did you read the article?

He's not lending money to himself to move money OUT of the company for protection.  He's lending money TO Freedom Industries to give it operating cash.
 
2014-01-20 11:31:40 AM

JeffKochosky: I haven't heard a single reference to am MSDS for this stuff since the story (and the storage) broke.


http://online.wsj.com/public/resources/documents/Eastman.pdf
 
2014-01-20 11:33:48 AM
They should dump all the chemicals into the CEOs pool. Maybe once his and his families lose their hair and get cancer they will take it serious.
 
2014-01-20 11:34:00 AM
Freedom is right there in the name

The proprietor is blameless, in perpetuity, throughout the universe.

That's how freedom works; tolerating that which you may dislike.

On the additional plus side, hippie libs everywhere are sucking it as I type.
 
2014-01-20 11:34:04 AM
Meanwhile over at FOX...

i28.photobucket.com
 
2014-01-20 11:34:05 AM
Never mind the people that get killed by this type of stuff. The EPA is killing JOBS!

www.weeklystandard.com
 
2014-01-20 11:37:05 AM
Ultimately the blame goes to the voters of red states that have swallowed the "biz regulation is demonic communism"  BS.  The same Tea-Party types who are now applauding the recent court ruling that allows ISPs to do what they want, when they want, are going to be the first victims of those very same ISPs.

You red-staters wanted deregulation and you're getting it.....you're getting it good and hard.
 
2014-01-20 11:37:27 AM

Heraclitus: Either Clifford really got caught holding the bag, or he is ready to retire and is taking one for the team.

This sounds like an elaborate shell game to protect the larger corporations assets.

Freedom Inc. was purchased 2 weeks before the leak was discovered?

They only have 3 million in assets?

Filed Chapter 11 immediately?

Another set of shell companies incorporated almost overnight, to provide financial backing with plausible deniability?

Something stinks, and it doesnt smell of licorice....


Agreed. They need to find him personally liable and go after his personal net worth.

He can sue whoever he bought the company from in return.

This whole story is disgusting.
 
2014-01-20 11:37:40 AM
JeffKochosky:

What really scares me about all this is that no one seems to have any idea what MCHM's potential hazards are. I haven't heard a single reference to am MSDS for this stuff since the story (and the storage) broke.

MSDS for MCHM
The MSDS mostly says "Unknown" about everything.  So, by all means, let's let this stuff spill out everywhere.
 
2014-01-20 11:38:13 AM
This dude's OnStar calls his liability lawyer automatically instead of EMS.
 
2014-01-20 11:38:32 AM
J Clifford Forrest. That is the man responsible for this.

Please be sure to repeat it in every one of these threads. If he wants to wriggle out of this, his life should be public and over.
 
2014-01-20 11:53:23 AM

Toggles: It seems the idea is that water turning to ice expanded, pushing that mystery "object" through the floor of the tank. Hard to say if the court will buy that. Shouldn't steel tanks containing dangerous chemicals be able to withstand the consequences of winter weather?


Don't you see? It is totally natures fault. If the natural world did not want all those chemicals dumped down its streams and into its ground water, it should have thought of that before it went freezing and pushing projectiles with its expanding ice. Doesn't Mother Nature know anything about chemical storage?


Mother Nature wants the virus-with-shoes, AKA humans, off her planet.
 
2014-01-20 11:58:53 AM
West Virginia's environmental safety laws explain a lot of what we think about West Virginians.
duhmerica.files.wordpress.com
 
2014-01-20 11:59:33 AM

justtray: J Clifford Forrest. That is the man responsible for this.

Please be sure to repeat it in every one of these threads. If he wants to wriggle out of this, his life should be public and over.


Except not at all, way to miss the point.  He bought the company just weeks before.  There's no way he could have had any part in the decisions that led up to and resulted in the spill.  Hard to figure out how you're not getting this, what with it being in the Fark headline and a paragraph in the article.  But hey, if you want to blame him while letting off the previous owners (you know, the people actually responsible), go for it.
 
2014-01-20 12:00:21 PM
Daddy won't you take me back to Muhlenberg County, down by the Green River where Paradise lay?

Well, I'm sorry my son but you're too late in asking - Mister Peabody's coal train has hauled it away...

/there's nothing new under the Appalachian sun
 
2014-01-20 12:03:15 PM

Heraclitus: Either Clifford really got caught holding the bag, or he is ready to retire and is taking one for the team.

This sounds like an elaborate shell game to protect the larger corporations assets.

Freedom Inc. was purchased 2 weeks before the leak was discovered?

They only have 3 million in assets?

Filed Chapter 11 immediately?

Another set of shell companies incorporated almost overnight, to provide financial backing with plausible deniability?

Something stinks, and it doesnt smell of licorice....


Yes; I'm not normally a tin-hat kinda guy, but this is way too convenient.  What evidence is there that this place was actually sold prior to the spill?  Of that evidence, how much can be verified to have existed before the spill?  People will fake anything to deflect losses, and by "people," I mean "corporations."
 
2014-01-20 12:08:29 PM

Satanic_Hamster: Subby, did you read the article?

He's not lending money to himself to move money OUT of the company for protection.  He's lending money TO Freedom Industries to give it operating cash.


In doing so, he has moved himself to the top of the list of entities that get paid off during liquidation. Every other creditor moves to the back of the line. In essence, he has arranged for the purchase of the entities assets for a fraction of their worth and the liabilities get pushed onto other creditors, to be forgiven after bankruptcy.

Individuals don't get to do this.
 
2014-01-20 12:08:31 PM
Since he can't be fined, can he watch his entrails be burned before his eyes instead?

Since fining polluters isn't business  friendly, wouldn't that be the acceptable alternative?
 
2014-01-20 12:10:19 PM

Heraclitus: Either Clifford really got caught holding the bag, or he is ready to retire and is taking one for the team.

This sounds like an elaborate shell game to protect the larger corporations assets.

Freedom Inc. was purchased 2 weeks before the leak was discovered?

They only have 3 million in assets?

Filed Chapter 11 immediately?

Another set of shell companies incorporated almost overnight, to provide financial backing with plausible deniability?

Something stinks, and it doesnt smell of licorice....


Yep, plus the fact that the founder of Freedom Industries is a convicted embezzler that the involved parties claim is no longer involved but is still on the paperwork for the business (Carl Lemley Kennedy II).
 
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