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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
    More: Fail, chemical accident, West Virginia, VF Funding, shell companies, United States bankruptcy court, unsecured creditor  
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6283 clicks; posted to Main » on 20 Jan 2014 at 10:40 AM (2 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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Archived thread
2014-01-20 11:34:04 AM  
4 votes:
Meanwhile over at FOX...

i28.photobucket.com
2014-01-20 12:51:26 PM  
3 votes:
In my opinion, this is another example showing that the nation's infrastructure, both public and private, is seriously deteriorating.  Unfortunately, repairing and replacing the infrastructure takes the kind of money no one wants to spend.  Taxpayers, especially the tea partiers, whine about high taxes and corporations ignore these costs as they seek to maximize profits.  Obama and Congress could still institute a massive public works program that would stimulate the economy and create jobs while modernizing the nation but they would rather bailout Wall Street, waste money on pointless wars, and spy on the public.
2014-01-20 10:53:55 AM  
3 votes:
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 01:40:20 PM  
2 votes:
...So, just to make sure everyone's up to speed:

1) Freedom didn't report the spill; instead, EPA officials found their employees throwing sandbags around to try to sop the chemical up
2) The identity of the chemical was only discovered by pure chance: an EPA official, who by random chance had previous experience working with the chemical, smelled it onsite and raised the alarm
3) Initial reports from the Water company were that they were alerted to the presence of the chemical by the smell; yet, days later, they've told residents that being able to smell the chemical in their water shouldn't be cause for alarm
4) The water company, two or three days in, suddenly stopped taking direct inquires from the press, and instead decided that press communication could only occur if questions were submitted ahead of time, and through a 3rd party
5) Officials tested for a crude version of the chemical.  Only after all residents were told their water is safe was it revealed that would actually leaked into the water was a combination of chemicals, most of which were untested
6) 2 days after telling residents they could drink the water, pregnant women were told that, in fact, maybe they shouldn't be drinking the water
7) Emergency water supplies set up to distribute to customers who had no access to clean water were drawn from the site of the original spill
8) Freedom Industries declared bankruptcy, and immediately received an emergency loan for a company with one listed official: the president of Freedom Industries
9) the Water Company put a color-coded map on their website.  On the legend were splotches of red and blue.  3 days in to clearing customers to resume drinking their water, the legend entry next to the color blue and the words "Water is safe" was modified to include an asterisk.
10) County health officials, responding to an increased number of hospital admittances after the all-clear was given, are chalking it up to flu season.
11) The only thing our Governor and junior senator have been clear about: don't blame this on coal.  Additionally, Senator Joe Manchin on Saturday said, "To err is human" when asked about the need for additional regulations to prevent this from happening in the future.

--

To err is f*cking human.

Maybe if all this ineptitude was included in a single article, more people would care about what's happening here.
2014-01-20 01:17:21 PM  
2 votes:

All2morrowsparTs: Emposter: justtray: Emposter: 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.

Hes not going to sleep with you. He IS responsible. He should have done his dilligence and realized there had been no inspections and that the overflow wasnt functioning. Thats his fault, he is to blame. Like i said, he can sue the people he bought it from, but he IS responsible, 100%

The hell he is, and your inexplicable desire to jump on him would let the people actually at fault get off, just because they managed to offload the time bomb they built onto someone else just before it blew up.  I hope whatever prosecutors end up going after culprits down the line are more rational, and don't  let the people who created this mess and kept it from being found and fixed for years get off scot-free.

Why not both? It seems no one has clean hands in this matter, including the private water company.


Only if both are actually responsible.  Forrest is responsible to whatever investors he just farked, for sure, since he clearly failed in his duty to safeguard their money.  And he's a shmuck for having his company go into turtle mode instead of stepping forward to help mitigate the disaster.  He might even be a tiny bit responsible for the actual spill depending on what he did in the three months he owned the company, though probably not (negligence requires that a person not take reasonable steps to prevent the damage, they don't have to be inhumanly perfect and fix everything intantly...3 weeks is a very short time to find and fix every defect in a major acquisition, especially considering such defects were probably glossed over if not actively hidden from the new purchaser.  For example, in premises liability (not the same, but similar), an owner isn't liable for injuries caused by a condition they didn't know about (unless they should have)...the previous owner is or the builder).  The article provides no evidence that he was told about the defective tank or that he later found out (prior to the accident, of course).  In the event that he did find out, his responsibility to fix it in mere weeks would be miniscule compared to overall responsibility by previous owners (and moral responsibility of shiatty regulators and local politicians, but we can ignore that I guess).  Not equal responsibility, definitely not mostly responsible, and certainly not 100% responsible.
2014-01-20 12:53:53 PM  
2 votes:
Shell corporations; Not just to hide money in Nassau.


This shiat is getting beyond the scope of ridiculous.  It's the same game that made Bain Capital millions, and insulates countless businesses from liability that they should be forced to deal with.

You can't have a free market when everyone has stacked the cards so that failure is impossible.  People need to have skin in the game.
2014-01-20 12:33:01 PM  
2 votes:

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.


Worked for a water and sewer utility GC for years.  Welded steel tank or bolt together glass lined tank that we built had a pad-base, included 10" of diesel oil soaked sand, on top of fine stone 'screenings' that prevented rust and cushioned the tank bottoms from 'mystery objects' during freezing and thawing.  And when we built them at landfills for leachate treatment facilities, they all had concrete containment ring walls with drains, in case of a breach.

WHERE WERE THE INSPECTORS?
2014-01-20 12:28:30 PM  
2 votes:

Emposter: 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.


Hes not going to sleep with you. He IS responsible. He should have done his dilligence and realized there had been no inspections and that the overflow wasnt functioning. Thats his fault, he is to blame. Like i said, he can sue the people he bought it from, but he IS responsible, 100%
2014-01-20 12:08:29 PM  
2 votes:

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 11:37:05 AM  
2 votes:
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 11:34:05 AM  
2 votes:
Never mind the people that get killed by this type of stuff. The EPA is killing JOBS!

www.weeklystandard.com
2014-01-20 09:18:14 AM  
2 votes:
This guy should drown in those chemicals he's allowed to spill.
That would be the perfect karmic death.
ZAZ [TotalFark]
2014-01-20 09:02:18 AM  
2 votes:
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 03:00:14 PM  
1 vote:

Syrrh: serial_crusher: It probably does suck a whole lot to make an investment like that and have it fall apart so quickly.
Then again, I probably wouldn't buy a chemical storage facility that hadn't been inspected for 20 years.  I mean, when I bought my house I got my own inspection done on the place before closing...

That's the big thing that mostly negates this article for me. Okay, the tanks were inspected and deemed safe. Great. If I'm buying the place, I'm not taking YOUR word for that. Unless the few hundred bucks to hire an inspector blows out the budget for the entire deal, he's coming to take a second look and make sure the seller's not blowing smoke.


...and that's yet another piece missing from this current version of the story.

Inspectors found that Freedom's storage facilities were in need of over $1 million in repairs, and a company spokesperson acknowledged that they had earmarked funds to make needed repairs, but just hadn't gotten around to it.  This was early last week.

That narrative, of course, is completely at odds with the new claim that cold weather in combination with a broken water line is to blame, but since someone living outside the affected area needs to comb back through 2 weeks worth of news stories from countless different sources to figure that out, it doesn't really matter.
2014-01-20 01:25:23 PM  
1 vote:

runwiz: In my opinion, this is another example showing that the nation's infrastructure, both public and private, is seriously deteriorating.  Unfortunately, repairing and replacing the infrastructure takes the kind of money no one wants to spend.  Taxpayers, especially the tea partiers, whine about high taxes and corporations ignore these costs as they seek to maximize profits.  Obama and Congress could still institute a massive public works program that would stimulate the economy and create jobs while modernizing the nation but they would rather bailout Wall Street, waste money on pointless wars, and spy on the public.


I'm pretty sure that if Obama proposed The New Deal II: Electrification Boogaloo, Congress would decide it was time to holler about the debt limit and that gubbermint can't create jeorbs.

Why? Cause that's exactly what they did!
2014-01-20 12:41:13 PM  
1 vote:

justtray: Emposter: 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.

Hes not going to sleep with you. He IS responsible. He should have done his dilligence and realized there had been no inspections and that the overflow wasnt functioning. Thats his fault, he is to blame. Like i said, he can sue the people he bought it from, but he IS responsible, 100%


The hell he is, and your inexplicable desire to jump on him would let the people actually at fault get off, just because they managed to offload the time bomb they built onto someone else just before it blew up.  I hope whatever prosecutors end up going after culprits down the line are more rational, and don't  let the people who created this mess and kept it from being found and fixed for years get off scot-free.
2014-01-20 12:20:43 PM  
1 vote:
lh3.ggpht.com
imageshack.com
www.trunews.com
2014-01-20 12:03:15 PM  
1 vote:

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 11:59:33 AM  
1 vote:

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 11:37:40 AM  
1 vote:
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 11:25:45 AM  
1 vote:

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 11:22:29 AM  
1 vote:
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 11:21:12 AM  
1 vote:
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 11:20:54 AM  
1 vote:
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 11:11:17 AM  
1 vote:
We need to start executing corporate executive. It will only take one or two for the rest to get the message.
2014-01-20 10:59:55 AM  
1 vote:

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 10:58:08 AM  
1 vote:
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 10:57:04 AM  
1 vote:
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 10:56:34 AM  
1 vote:

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 10:54:15 AM  
1 vote:
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 10:46:03 AM  
1 vote:
How long until this guy is shredded by Fox for being an America-hating Global Warming Apologist?
2014-01-20 10:45:01 AM  
1 vote:
Freedom Industries. Chemstream Holdings. Rosebud Mining Co?

This is all an elaborate prank, right?
2014-01-20 10:31:58 AM  
1 vote:
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 10:18:30 AM  
1 vote:
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.
 
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