"Freedom Payments a 'Red Flag'"

"CHARLESTON, W.Va. -- In the year before it filed for bankruptcy, Freedom Industries paid more than $6 million to its former owners and to companies affiliated with its current owners, court filings show."

"These payments to what bankruptcy law calls "insiders" will be closely examined by Freedom's creditors and could be ordered returned to the company if they're deemed improper, bankruptcy lawyers said.

"It is a red flag," said Bob Simons, a bankruptcy lawyer with the Pittsburgh firm Reed Smith. "Any transfer within a year, to even as much as four years before the bankruptcy, can be scrutinized to see if those transfers should be returned to the bankruptcy estate.""

Kate White and David Gutman report for the Charleston Gazette February 19, 2014.

Source: Charleston Gazette, 02/21/2014