- Associated Press - Saturday, April 9, 2016

CHARLESTON, W.Va. (AP) - A federal judge said he wants more information before he’ll approve a class-action settlement stemming from a 2014 chemical spill in West Virginia that contaminated the region’s Elk River drinking water supply.

The case involves Kanawha Valley residents and businesses and two former top officials from Freedom Industries. U.S. District Judge John Copenhaver told lawyers in the case Friday that he wants more details about the finances of one of the former Freedom officials - longtime company co-owner Dennis Farrell, The Charleston Gazette-Mail (https://bit.ly/1qepBGx) reported.

The judge also wants more details about whether Farrell and former Freedom President Gary Southern remain targeted in any other lawsuits that also could be settled.

The judge told the attorneys to get back to him about those matters by May 13.

Under the proposed settlement, Southern would pay $350,000 and Farrell $50,000 to the class of residents represented in the case. The money would be paid into a court account, and then used only “to benefit the class” after some later order from Copenhaver.

Exact plans for the money have not been made clear in court documents, hearings or a public notice to the class members.

In arguing for approval of the deal, lawyers for the residents had said one reason to do so was that Southern and Farrell “are unlikely to be able to pay the large compensatory damage award” that could be assessed if the case went to trial.

Kevin Thompson, a lawyer for the residents and businesses, had said in a court filing that Southern - who would not share his financial records with the plaintiffs - is in a “relatively secure financial position,” but that his “day to day responsibilities” for the operation of the Elk River facility “appeared limited,” compared to Farrell and “others who worked at the site daily.”

Thompson said Farrell’s financial position “was utterly decimated” by the spill and by his need to pay criminal defense lawyers and respond to civil cases filed after the incident.

The settlements with Southern and Farrell also involved both men giving up their effort to have Freedom’s insurance company fund their legal costs in lawsuits and criminal cases, a move that allowed more than $3 million to be obtained from AIG Insurance for use in paying leak claims in Freedom’s bankruptcy and on the cleanup of the company’s Etowah River Terminal on the Elk, where the spill occurred.

Thompson said the settlement with Southern and Farrell was needed to ensure a speedy and appropriate cleanup of the Freedom site.

Copenhaver said civil cases against Southern and Farrell are likely strong, given that each man pleaded guilty to criminal charges related to the spill. Southern and Farrell are currently incarcerated, serving 30-day sentences ordered by U.S. District Judge Thomas Johnston.

Copenhaver, though, said he had seen “no evidence” to support the claims about Farrell’s finances being in such bad shape.

Mike Carey, Farrell’s lawyer, told the judge that Farrell made about $3 million from the sale in December 2014 of Freedom’s operations to Chemstream, a Pennsylvania company that owned the site of the spill the following month. He said Farrell owed about $1 million in tax debt, and while he had been making $300,000 a year, he was unable to get other work after the spill.

Carey said legal work for Farrell has run through most of “several hundred thousand dollars” in retainer. He said Farrell can’t afford ongoing legal expenses for civil cases, although he has some assets, such as cars and a home.

Copenhaver said he wants more documentation and answers about Farrell’s finances. Also, the judge told Carey and Southern’s lawyer, Bob Allen, to do more research to see what other spill lawsuits the men had been named in and see if those potentially could be settled.


Information from: The Charleston Gazette-Mail, https://wvgazettemail.com.

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