Law Firm Has History With West Virginia Chemical Company

By Peg Brickley and Jacqueline Palank

When Freedom Industries Inc. faced mounting litigation over a chemical spill that tainted the water supply of a large swath of West Virginia last month, it turned to lawyers at McGuireWoods LLP as it sought Chapter 11 protection.

The firm, home to more than 900 lawyers in the U.S. and overseas, was well known to Freedoms leaders.

Weeks earlier, McGuireWoods represented Chemstream Holdings Inc. when it acquired Freedom for $20 million. In that takeover, McGuireWoods also represented the subsidiary that owned the site where the trouble started. In matters unrelated to Freedom, McGuireWoods has represented J. Clifford Forrest, the Pennsylvania mine operator who owns Chemstream, as well as Mr. Forrests Rosebud Mining Co. Read the full story here.

McGuireWoods disclosed most of these connections to the bankruptcy court on the first day of Freedoms Chapter 11 case and won the courts approval to represent Freedom.

But bankruptcy experts say disclosures raise new questions that may require answers as creditors begin to form ranks. Can McGuireWoods represent Freedom in battles that may pit the companys interests against those of the law firms former clients? Such battles are likely to be waged in the coming weeks, as the cash-crunched company contends with the fallout from last months chemical spill, which contaminated the water supply of some 300,000 West Virginians.

In a court filing late Tuesday, McGuireWoods said it wouldnt represent Freedom in the event of clashes with Freedoms owners.

The firm will not represent [Freedom] in matters directly adverse to Rosebud Mining, or to Mr. Forrest, McGuireWoods said, supplementing its earlier disclosures. The firm also wont be able to investigate, on Freedoms behalf, Chemstreams takeover of Freedom. That work will fall to Barth & Thompson, a West Virginia firm hired to work on the case, according to the filing.

McGuireWoods spokesman Bob Lewis said the law firm takes very seriously its ethical and disclosure obligations and devotes significant resources to those matters to ensure compliance.

Mr. Forrest didnt return calls seeking comment.

Originally posted here:
Law Firm Has History With West Virginia Chemical Company