The Bankruptcy Files: Freedom Taps McGuireWoods for Chapter 11
More than five months after a Maine-based railroad company filed for bankruptcy as a result of its role in the derailment and subsequent explosion that killed 47 people in Quebec, the company responsible for another environmental disaster has began Chapter 11 proceedings in West Virginia.
Freedom Industries, a Charleston, W. Va.–based company responsible for a recent chemical spill in West Virginia that prompted state officials to impose drinking water bans that affected roughly 300,000 local residents, filed for bankruptcy in its home city late Friday. The move by Freedom, which is owned by Kittanning, Pa.–based Chemstream Holdings, allows it to put on hold dozens of suits filed against the company since the spill shut down much of Charleston earlier this month.
Pittsburgh-based McGuireWoods bankruptcy partner Mark Freedlander said in a statement announcing that Freedom had retained his firm that the company’s Chapter 11 “petition and related pleadings speak for themselves."
Other McGuireWoods lawyers advising Freedom include hospitality industry head Michael Roeschenthaler, litigation partner Ronald Crouch, bankruptcy counsel Scott Schuster and associate Jason Alter. A declaration by Freedlander states that McGuireWoods has been paid a $75,000 retainer by Freedom and that attorneys from the firm are billing the debtor between $245 and $800 per hour for their services.
J. Nicholas Barth and Stephen Thompson from Charleston’s Barth & Thompson are serving as local and special conflicts counsel to the debtor. Court filings show that Freedom has paid the firm a $25,000 retainer and that its attorneys are billing $350 per hour.
Freedom has also sought to retain Pietragallo Gordon Alfano Bosick & Raspanti as special litigation counsel. A declaration by Paul Vey, a litigation partner in the firm’s Pittsburgh office, says that the hourly rates for attorneys handling some of the 20 suits filed against Freedom range from $95 to $375 per hour.
On Tuesday, some U.S. senators sought to close a loophole in a federal law that allows companies to avoid paying environmental cleanup costs, according to sibling publication The National Law Journal.
Meanwhile, as The American Lawyer reported last month, Kirkland & Ellis and Skadden, Arps, Slate, Meagher & Flom have dominated the market lately for debtors’ side bankruptcy work amid a dearth of large filings. Now Kirkland is among several Am Law 100 firms picking up recent work on behalf of key clients pursuing out-of-court restructurings.
GSE Holdings, a Houston-based engineering firm controlled by private equity firm Code Hennessy & Simmons, has hired Kirkland to explore the potential sale of assets to repay its debt after failing to securing a refinancing package, according to a recent report by The Deal.
Separately, Bloomberg reported last week that K&L Gates has been retained by Brookstone Co., the privately owned retail chain known for its high-tech gadgets and other devices, as it seeks to restructure debt with bondholders represented by Stroock & Stroock & Lavan.