Skip to main content

As first noted in the recommended diary "WV Spill: Multi-Millionaire Tied to GOP Dark Money Fronts Freedom Bankruptcy Cash," several aspects of the bankruptcy protection sought by Freedom Industries are, putting it mildly, irregular. I looked for a follow-up diary and since I didn't find one, thought I'd do a quick post. Apologies if this was diaried already; it's a few days old.

Freedom Industries is responsible for the Elk River contamination in West Virginia. They claim that they cannot pay for the damages and have filed for chapter 11 bankruptcy. The bankruptcy judge said that this case is "one of the most unique Chapter 11 cases I've ever seen." For example:

About an hour after Freedom filed for bankruptcy Friday, the company filed an emergency motion for "debtor-in-possession" (DIP) financing, which would allow it to secure a loan up to $5 million to continue to function in some capacity. The loan would, according to the filing, "provide additional liquidity to [Freedom] in order to allow it to continue as a going concern."

DIP lenders are often among the first agencies to get their money back from bankrupt companies.

Freedom's proposed DIP lender is WV Funding LLC, which was incorporated in West Virginia on Friday, the day Freedom filed bankruptcy.

WV Funding's one listed member is a company called Mountaineer Funding LLC. Mountaineer Funding also was founded Friday, according to filings with the Secretary of State's Office. There is also a space for Mountaineer Funding to sign on the DIP agreement.
In a filing Sunday, West Virginia American Water Co. asked the judge to deny Freedom Industries' request for a loan, which the water company said "smells of collusion."
In its bankruptcy filing, Freedom described the DIP agreement as being negotiated between the parties "in good faith and at arms-length." But the water company notes the fact that the DIP lender that owns Freedom isn't disclosed in the bankruptcy filings.
(emphasis added)

What's the term I'm looking for? Shell game?

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site