$2.9 million settlement reached in West Virginia chemical spill

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

(CNN) — A settlement was reached Friday with the company at the center of a January chemical leak that contaminated the water supply for 300,000 West Virginians, according to an attorney for the plaintiffs.

Freedom Industries Inc. would transfer $2.9 million into a trust fund that will be used “for the greater good,” according to Anthony Majestro, one of the attorneys in the class-action lawsuit.

“Things like chemical testing and medical studies,” said Majestro, who called the trust fund “a mechanism to answer some of the things that are still unanswered.”

On January 9, more than 7,000 gallons of 4-methylcyclohexane methanol (MCHM) — a licorice-odored chemical used to clean coal — leaked into the Elk River from a Freedom storage tank.

The result was a do-not-use order that left about 300,000 people in and around Charleston, the state capital, unable to drink or bathe for several days. A week after the spill, Freedom Industries filed for Chapter 11 bankruptcy protection.

Majestro said the money for the proposed trust fund would come from the $3 million insurance settlement Freedom received for spill-related claims.

Under the terms of the agreement, which still have to be approved by a judge, 24 pending lawsuits against Freedom Industries would be settled.

These were the suits brought by plaintiffs who were customers of West Virginia American Water and whom either lived in, worked in or owned a business in the affected area between January 9 and January 19, according to Majestro.

The settlement does not affect the more than 60 suits that have been brought against other parties such as West Virginia American Water, Eastman Chemical Company, which manufactures MCHM, or against named individuals at Freedom Industries.

Majestro — who was among those affected by the spill — thinks that a public trust fund is the best way to use the $2.9 million, but he said individuals would have the option to receive a onetime payment instead. With an estimated 300,000 eligible claims, the most any one person could get would be less than $10.