"Everyone recognizes that the course that Freedom Industries is on was inevitable following the Jan. 9 spill," said Anthony Majestro, a Charleston lawyer involved in lawsuits against Freedom. "It's good, in that the bankruptcy process appears to be proceeding in an orderly fashion and limited resources aren't being used unnecessarily over how the bankruptcy should proceed."
Pearson approved Freedom's request to retain two additional law firms: Babst Calland, a Pittsburgh environmental firm; and Pietragallo, Gordon, Alfano, Bosick & Raspanti, another Pittsburgh firm.
The judge approved Freedom's request to hire environmental experts to inspect the site -- a metallurgist, a structural engineer and a hydrologist -- at an estimated initial cost of $75,000. He said the plaintiffs would be hiring environmental experts, so it was only fair to let Freedom do the same.
"Unless we have an agreement to all hire the same experts," Pearson said, as laughter echoed in the courtroom, "then you're each entitled to your own experts."
When it filed for bankruptcy in January, Freedom had requested a $4 million emergency loan, called debtor-in-possession financing.
Pearson ended up approving a $3 million DIP loan, but Freedom told the court Friday that it had not used that loan, and would not need it because the company is shutting down.
That money was lent to Freedom by a brand-new company called WV Funding LLC, whose parent company is owned by J. Clifford Forrest, the man who owns Freedom Industries.
Freedom will pay back the $3 million loan, with interest and a $20,000 lender fee, even though both Freedom and WV Funding are ultimately owned by the same person.
Freedom now has about $4.5 million in cash balance, according to bankruptcy filings. On March 16, after it has sold all its inventory and must begin tearing down its Elk River site, it expects to have about $5.4 million in cash, according to filings.
In the month ending March 16, Freedom expects to spend more than $1.7 million on environmental expenses, including environmental legal fees, according to filings.
Another bankruptcy hearing is scheduled for Tuesday.
Reach David Gutman at david.gut...@wvgazette.com or 304-348-5119.