WV American Water opposes federal settlement that could fund help for local area

This is a complicated situation, so you will have to follow some of the links in this post to get the details.  Here is the basic outline:

  • Shortly after the Freedom Industries spill in early 2014, a number of affected citizens, businesses and government agencies sued Freedom Industries and other parties for damages in the federal Southern District Court in Charleston.
  • In June, AIG Specialty agreed to pay an insurance claim to Freedom Industries of $2.9 million pursuant to Freedom’s insurance policy with AIG.  Here is a link to Ken Ward’s article on the insurance settlement in the Charleston Gazette.
  • In July, the lawyers for the plaintiffs in the federal case announced that they had reached a tentative agreement with Freedom Industries to use some of the AIG $2.9 million to settle the federal case, and use the AIG money to fund services to help people affected by the Freedom spill.  The lawyers also announced that they would take no fees from the settlement amount.  Here is a link to Ken Ward’s article which provides details of the federal court settlement and how it would be implemented.
  • In September, West Virginia American Water announced that it opposed the federal court settlement, because it wanted a big chunk of the AIG money for itself.  Here is a link to the AP story on WV American Water’s opposition to the federal court settlement.

The overall situation is complicated because there is also a case in federal bankruptcy court to liquidate all the assets of Freedom Industries and settle claims by Freedom’s creditors in that case.  WV American Water is a creditor in the bankruptcy case with significant claims against any money that comes into Freedom Industries’ bankruptcy estate.  Because the $2.9 million paid by AIG to Freedom is part of that bankruptcy estate, the judge in the bankruptcy case must get all the claimants in that case to allow a big part of that $2.9 million to go toward settling the federal damage suit in federal circuit court.

WV American Water executives, and their bosses at American Water Works, care about their company profits and shareholder dividends.  The health and safety of WV American Water’s customers and the people of the Kanawha Valley are hardly their highest priority.


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