Gary Strauss @gbstrauss

USA TODAY

Chemical spill on Elk River affected 300%2C000 West Virginians

Company%2C ordered closed last week%2C declines comment

Freedom Industries, the chemical company behind the toxic leak that tainted West Virginia's Elk River and forced 300,000 state residents and businesses to go without water for several days, filed for bankruptcy protection Friday.

The Chapter 11 bankruptcy filing will allow the company — facing at least two dozen class-action lawsuits and several state and federal probes — to reorganize and continue operating under federal law.

Freedom, which was ordered shut down last week by state officials, declined comment Friday. A 35,000-gallon storage tank operated by the company leaked thousands of gallons of the coal processing chemical 4-methylcyclohexane methanol (MCHM), into the Elk River on Jan. 9, affecting residences, businesses and schools in nine counties. MCHM can cause skin irritation, vomiting and diarrhea.

Freedom owes $3.66 million to its top unsecured creditors, according to bankruptcy documents, The Charleston Gazette reported.

The company has been in hunker-down mode since last Friday, when company co-founder Gary Southern gave a brief press conference, dodging questions about the company's monitoring and preventive measures in the 7,500-gallon spill.

The company, initially launched in the mid-1980s, formed under a new entity in December when it merged with Etowah River Terminal, which operated the site, a former oil and gas terminal owned by Pennzoil-Quaker State. Other Freedom partners include chemical processor Poca Blending and Crete Technologies, a Delaware limited partnership, according to reports by TheCharleston Gazette and TheWall Street Journal. The companies share many of the same executives, while Southern has ties to five Florida-based mining and chemical companies, the Journal reported.

An inch-wide hole in the storage tank caused the leak.

The bankruptcy filing states that while "facts surrounding the incident are subject to pending investigation by Freedom and various regulatory and other government authorities," the company says that a local water line break next to the storage tanks may have caused the ground underneath to freeze, causing a pierce in the bottom of the tank that leaked.

Freedom said it owes $3.66 million to its top 20 unsecured creditors, according to bankruptcy documents.

Separately, the Internal Revenue Service says it's owed over $2.4 million in taxes dating back to 2001.

While the ban on using public water supplies has been lifted for most of the counties affected by the spill, some residents have been advised not to drink the water, and others have been told to boil water as a precaution. Bottled water is still being distributed in several areas. The Centers for Disease Control and Prevention also recommends that pregnant women consume bottled water.