Freedom Industries executives claim in a new bankruptcy filing they have no ties to a business seeking to purchase assets of the company’s Poca Blending facility in Nitro.
The company at the heart of January’s chemical leak filed motions Monday seeking the federal bankruptcy court to approve the sale of assets of its Nitro facility to Lexycon LLC on an accelerated basis so it won’t risk liquidation of the facility.
According to previous media reports, a former Freedom executive founded the business and could have ties to at least two other executives.
The company was founded in Florida with a mailing address near Freedom President Gary Southern’s home on Marco Island. A week later, the company registered in West Virginia listing a Naples address.
Lexycon later issued a news release on its website saying its only employees are former Freedom sales associates, along with Lexycon President Kevin Skiles.
Lexycon’s news release also stated Southern isn’t tied to the business and said former Freedom President Dennis Farrell isn’t an owner or employee.
The company says Farrell serves as an independent consultant helping companies transition related to the coal industry.
According to Monday’s bankruptcy filing, Skiles served as a former Freedom vice president of research and technology.
Mark Welch, whom the bankruptcy court previously approved as Freedom’s chief restructuring officer, later filed an addendum to the purchasing motion that clarified Skiles’ role with Freedom.
In that filing, Welch said in a December transaction involving the sale of Freedom shares and membership interests in the Etowah River Terminal, Skiles had a 5 percent equity option for stock in the company. The filing says Skiles received an equity payment of $230,203.60 and a bonus payment amounting to $273,203.42.
In the bankruptcy court filing, Freedom says Lexycon and Freedom entered into an asset purchase agreement on Monday where the company will purchase Poca Blending’s assets for $575,000.
The filing notes Welch came to the conclusion that “the Freedom name is irrevocably tainted due to the (leak) such that absent the sale of the purchased assets, the Nitro facility would need to be demolished.”
Welch also figured, the document continued, that demolishing the facility would end up costing Freedom’s bankruptcy estate about $400,000 of the liquidated value of the purchased assets.
Noting the “extensive” media coverage, the document says Lexycon was aware of Freedom’s circumstances because its affiliated company was one of Freedom’s suppliers.
The filing asserts Lexycon’s bid was conducted at “arm’s length” and says the company isn’t an insider or affiliate of Freedom and isn’t Freedom’s successor.
“In addition no owner or executive of the buyer is or was an owner or executive of the debtor nor the predecessor in interest to the debtor,” the filing states.”
In its second motion, Freedom asked the court to grant an expedited hearing so that Lexycon can begin operating upon closing of the sale.
The motion said if the sale doesn’t close on an accelerated basis, Freedom may incur substantial expenses and risk liquidating the Poca Blending facility.