Does Freedom Industry filing bankruptcy mean they are absolved of all liability?

No.

Filing Chapter 11 bankruptcy will, however, mean that no lawsuits against Freedom Industries can be brought and all pending lawsuits are essentially paused and all proceedings are held in bankruptcy court. Plaintiffs suing Freedom Industries can seek permission from the bankruptcy court judge for the other suits to proceed.

It is unclear (and more complicated), however, how much money Freedom Enterprises has and whether it will be able to pay if it loses one or more of the pending lawsuits. One issue is who it will pay first. Under bankruptcy law, some of Freedom Industry's debts are prioritized over other of its debts. Whatever money is left over after those with priority are paid will be distributed proportionally to everyone else they owe money to. For example, tax claims are given a high priority and Freedom Industries owes $2.4 million to the IRS.

On the other hand, Freedom Industries has had some significant corporate changes just a few weeks before the spill. On December 31, 2013, Freedom Industries merged with several other entities in the area, many of which have boards of directors that have overlapping members. Additionally, the company was sold to J. Clifford Forrest, who has other, more significant assets in coal mining. It is unclear whether lawsuits against Freedom Industries could successfully seek Forrest's assets. It is also unclear whether the former owners and/or operators of the facilities could be personally liable for the spill