CHARLESTON, W. Va. (CN) - Freedom Industries, blamed for the chemical spill that left more than 300,000 West Virginians without water, is in a "death spiral," its president said in a Chapter 11 bankruptcy hearing Tuesday.
Freedom is believed to owe the IRS $2.4 million in taxes dating back to 2000; the IRS had placed three liens on Freedom's property.
In a hearing in federal bankruptcy court Tuesday, Freedom president Gary Southern said the company needs $5 million in credit to keep operating, and sought to use a lender from Freedom's corporate parent.
Bankruptcy Judge Ronald Pearson, after hearing more than four hours of testimony, suggested that Freedom use $5 million of its own money, from a $20 million merger made on Dec. 9.
Southern is believed to have spent $800,000 on environmental cleanup last week alone.
Two weeks ago a holding tank at Freedom Industries leaked an estimated 7,500 gallons of 4-methylcyclohexane methanol into the Elk River in downtown Charleston. Poison control centers have received more than 2,000 calls from people suffering nausea, headaches and eye problems. The poisoned water left more than 330,000 people without water
for drinking, bathing or other household uses.
Residents were warned not to use tap water in parts of eight counties, including Kanawha, whose seat is Charleston.
The ban was lifted last week for many residents of the Kanawha Valley, though many people were leery. Some who took showers reported rashes and chemical burns. A stay-at-home mother in Teays Valley west of Charleston documented her first bath after the all-clear on Facebook with photos of what appeared to be a sunburn on her chest, but what she said was a chemical burn from the water.
A week ago today, the Centers for Disease Control said that pregnant women in the Kanawha Valley should not drink the tap water, even flushing the pipes as instructed, until zero trace of the chemical is found in the water.
This had many in the area concerned and infuriated, as it came days after West Virginia American Water gave the all-clear for hundreds of thousands of residents to resume drinking of the water, at the safe level of 1 part per million recommended by the CDC.
Officials with the CDC responded on Jan. 16 that the recommendation for pregnant women was made from an "abundance of caution," and did not apply to breastfeeding mothers, infants, and children.
Congresswoman Shelley Moore Capito and Senator Joe Manchin asked the CDC to explain why pregnant women should not drink the water in the Kanawha Valley.
"It is particularly concerning that as many as 150,000 people who had been under a 'Do Not Use' water order were told that their water supply was safe for use before the CDC's recommendation that pregnant women should consider an alternate drinking water source. We are deeply disappointed in the CDC for recommending a screening level before receiving all relevant studies and information, which has resulted in confusion, fear and mistrust among Kanawha Valley residents," the lawmakers said in a statement.
Dr. Raheel Khan, of the West Virginia chapter of the American Academy of Pediatrics, asked that the CDC's recommendation be extended to children younger than 3. Khan said small children consume more water, proportionately to their body size, than do adults. His fear is especially pertinent to parents of formula-fed infants, who mix formula with tap water.
Also on Thursday, Jan. 16, West Virginia American Water's relief tankers were pulled out of service due to speculation that water in the trucks may have been contaminated.
Residents receiving the relief water at the Crossings Mall in Elkview and Riverside High School had complained that the water emitted the same licorice odor as the tap water at their homes.
American Water originally told county officials that the tankers were filled "off site, out of Charleston." But American Water spokeswoman Laura Jordan later said the tankers were filled near the plant after zero levels of the chemical were detected. That did not go over well in Charleston.
Since the spill, 32 civil lawsuits have been filed in Kanawha County Circuit Court against Freedom Industries and West Virginia-American Water.
More than 411 people have been seen at hospitals, though only 20 have been admitted. None of the water patients are still hospitalized and none are in critical condition.
The West Virginia Poison Control Center had received 2,302 calls as of Tuesday.
Schools in Kanawha County were closed last week. This week they will use only bottled water in cafeterias, and will prepare foods that do not require water for cooking.
Bottled water will be available for schoolchildren instead of drinking fountains until Friday.