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Coal exec from Western Pa. tied to company behind W.Va. spill

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Friday, Jan. 17, 2014, 4:45 p.m.
 

A prominent Western Pennsylvania coal executive has ties to the West Virginia company whose leaking tank is blamed for poisoning the drinking water of 300,000 people.

The company, Freedom Industries Inc., is the target of multiple lawsuits and state and federal investigations stemming from the Jan. 9 spill. It filed a Chapter 11 petition on Friday with the U.S. Bankruptcy Court in the Southern District of West Virginia.

Freedom Industries President Gary Southern signed the bankruptcy paperwork.

The company has multiple ties to Cliff Forrest, owner of Rosebud Mining Co. in Kittanning.

Forrest could not be reached for comment. Jim Barker, Rosebud's executive vice president, said the company had no comment.

Freedom Industries is owned by Chemstream Holdings Inc., according to documents included in the bankruptcy filing. Chemstream Holdings shares a Kittanning mailing address with Forrest's Rosebud Mining Co.

Mark E. Freedlander, a partner with Pittsburgh law firm McGuireWoods, Downtown, and the attorney representing Freedom Industries, said in a statement that “the petition and related pleadings speak for themselves.”

A chemical used to clean coal leaked from a Freedom Industries storage tank and into the Elk River near Charleston in Kanawha County, W.Va., contaminating the state's largest water system and triggering widespread cleanup efforts and forcing authorities to haul water to residents.

The bankruptcy document stated the leaky storage tank appears to have been pierced through its base by an object. It theorizes that a water line that broke near the plant could have made the ground beneath the storage tank freeze in the frosty days before the spill. Temperatures plunged in the region Jan. 6-8.

The terminal that leaked had not been not inspected by state officials since 2001, when it was owned by a different company operating under more stringent rules, state environmental officials said. State officials said Freedom Industries bought the terminal last month.

Freedom Industries acquired the storage tank facility Dec. 31 through a merger with Etowah River Terminal LLC, a liquid bulk storage and distribution company, according to documents filed with the West Virginia secretary of state and the Kanawha County clerk. Forrest signed off on the documents as the manager of Etowah River Terminal.

Forrest also managed Poca Blending, a chemical processor and the sister company to Etowah River Terminal acquired in the merger. Delaware-based Crete Technologies was part of the merger.

More than 30 civil lawsuits have been filed against Freedom Industries and West Virginia American Water Co., said Cathy Gatson, the Kanawha County Circuit Court clerk. Gatson did not recall seeing Forrest named in the lawsuits.

Rosebud and any other companies Forrest owns likely are immune from the bankruptcy and lawsuits, said Robert Bernstein, a Pittsburgh bankruptcy attorney with the Downtown firm Bernstein-Burkley.

“Assuming that they are all separate entities, they would all stand on their own,” Bernstein said.

Neither Forrest nor Rosebud is listed in the bankruptcy filing.

Rosebud, founded in 1979, operates 25 underground mines and three surface mines in Western Pennsylvania and Ohio, according to its website. It is the third-largest coal producer in Pennsylvania and the 21st-largest in the country.

In 2011, Rosebud settled a lawsuit brought by the Department of Labor's Mine Safety and Health Administration alleging that the company warned its underground workers when federal inspectors were headed into its mines. The mine safety administration fined Rosebud $150,000 in the death of a miner who was killed when the roof of an Armstrong County mine collapsed in 2005.

Rosebud and Forrest have donated money to fund drug prevention and awareness programs in Armstrong County and gave $200,000 to a project to revitalize downtown Kittanning's Market Street. The American Cancer Society recognized Forrest and Rosebud in 2008 for donating more than $1 million to its Relay for Life campaign.

Aaron Aupperlee is a staff writer for Trib Total Media. He can be reached at 412-320-7986 or aaupperlee@tribweb.com. The Associated Press contributed to this report.

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