CHARLESTON, W.Va. -- A few days after a bankruptcy hearing where Freedom Industries announced the company is winding down its business, the company is due back in court for a creditors' meeting.
This meeting, which is scheduled for 10 a.m. Tuesday, is the next step in Freedom Industries' bankruptcy proceedings.
Attorneys said company president Gary Southern and chief financial officer Terry Cline will testify in this hearing since they testified at the hearing on first-day motions.
Freedom Industries filed for Chapter 11 bankruptcy on Jan. 17, following the Jan. 9 discovery of crude MCHM leaking into the Elk River.
Lawsuits against the company are still on hold, but attorney Anthony Majestro said discussions about lifting the stay are ongoing.
"I think everyone recognizes that the course Freedom is on was inevitable following the Jan. 9 spill," he said following Friday's hearing. "The parties and the bankruptcy court are doing their best to balance competing interests in Freedom's resources."
In Friday's hearing, Freedom Industries' attorneys announced the company would scale back its business and may cease to exist at some point in the future.
Freedom's attorney Mark Freedlander said the company is culling its inventory, transitioning its customers to competitors and trying to transition employees to existing vendors or competitors.
Although the business is winding down, attorneys said the case is not converting to Chapter 7 bankruptcy, or straight liquidation, and will remain under Chapter 11 proceedings.
"What we've learned is post-petition events have caused the debtor to recognize it's going to have to shut down a large part, if not all of, its facility," U.S. Bankruptcy Judge Ronald Pearson said.
Pearson asked if there was anything in the last few weeks that made the company come to this realization and Freedlander responded "the company's problems far exceed its size."
Pearson approved an order substantially modifying Freedom Industries' initial financing motion.
Attorneys for Freedom Industries said the company hasn't needed to use the $3 million it previously borrowed from WV Funding LLC. Under the interim order, Freedom will not use this money through March 18.
Attorneys said the company might not even need the money that is currently held in the estate's account. An attorney representing WV Funding proposed negotiating a different type of loan in the future to handle expenses to reclaim the site.
By March 15, the company needs to remove its stored materials and start decommissioning the Etowah Terminal. Attorneys said for the most part, inventory has been sold down and the company is working with the Department of Environmental Protection to decommission the facility.
During this period, the company will rely on proceeds from selling inventory.