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Editorial: Public good has greater claim in Freedom bankruptcy case

What was U.S. Bankruptcy Judge Ronald Pearson thinking? In a recent court filing involving Freedom Industries, perpetrator of the January water crisis, Pearson opined that the company had been “working conscientiously and diligently to implement a cost effective and safe means for demolition and cleanup.”

What? On June 12, the Freedom Industries site appears to have been overwhelmed by a summer shower. Runoff from the site once again flowed into the Elk River. And then the next day the same thing happened again.

Fortunately, a DEP inspector popped by. The place was deserted. No guard. No security. No one to notice the runoff going into the river. No one to monitor a pump that should have kicked on automatically.

This is hardly conscientious and diligent behavior.

Here is at least part of the problem. The goal of bankruptcy court is to protect creditors — to salvage as many assets as possible and to distribute them to the people and other companies who are owed. That goal is diametrically opposed to the cause of environmental protection. It takes money (for staff and supervision, among other things) to clean up a mess like Freedom Industries.

Randy Huffman, secretary of the state Department of Environmental Protection, righteously promised the site where a coal washing chemical spilled into the region’s drinking water in January would be cleaned up. Part of that process involves hiring contractors to manage the site in the meantime.

But in bankruptcy court, lawyers for Freedom’s creditors complained that those contractors were charging too much and putting in too many hours. The judge cut those payments.

Little wonder then that during two recent stormwater spills, DEP found contractors did not have enough staff on site to deal with problems.

Judge Pearson has also said that “environmental claims and actions necessary to protect public safety have the highest priority” in the Freedom case and that the public needs to understand and support the cleanup. No argument there. But Pearson has also sealed from public view some of the budget documents in the case. Those that are available suggest cleanup costs are running over budget. How can the public trust the court’s oversight of this bankruptcy when he seals important documents from the public? When what is good for creditors is not the same as what is good for the public? When five months after the spill, despite DEP’s promises, the site cannot handle that most foreseeable of events, a spring shower?

As valid a claim as Freedom Industries’ creditors have, the greater public good to be served here is the cause of clean water, of an unpolluted river, of legitimate confidence in the drinking water and consideration of the local economy that affects everyone. Is there room in bankruptcy court for that fact?


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