Workers at the derailment site in Lake Megantic - 16 Jul 2013 Ryan Remiorz.
5 September 2013
Lake Megantic Blast Railroad
Could be Sold by Year's End
Lake Megantic Quebec - The bankrupt railroad whose runaway train sparked a fire and explosion that killed 47 people in Quebec could be sold by year's end, the company's trustee said Thursday.
Montreal, Maine & Atlantic Railway (MMA) has made no secret that its sale will be necessary to repay creditors and victims following the disaster.
And railroad trustee Robert Keach said he's already been approached by "several" potential buyers.
"There is a sale process that has already begun. We're talking to interested parties," said Keach, a Portland, Maine, attorney.
He declined to name any of the potential buyers.
The company filed for bankruptcy protection a month after the disaster, and the sale of the Hermon, Maine, based railroad would have to be approved by U.S. Bankruptcy Court.
If a buyer purchases all 824 kilometres of rail in Maine and Canada, then the deal would have to be approved by officials in both countries.
MMA continues to operate but has laid off most of its workers because rails through Lake Megantic remain out of commission, disrupting the flow of goods.
Next week, Keach hopes to file with U.S. Bankruptcy Court a proposal for a loan that'll help the company continue operations through the bankruptcy process.
Keach also plans to file a proposal for funding bankruptcy administration costs that he says would not drain funds that should go to creditors and victims.
A judge previously said he was concerned that attorney fees could drain the company of funds before victims of the train crash could be compensated.
Company chairman Ed Burkhardt discussed the idea of selling the company soon after the unattended train derailed.
According to documents filed in bankruptcy court, the railway company is worth US$50 million to US$100 million, but Keach declined to discuss how much the company might sell for.
Any proceeds from the company's sale would be used to repay creditors and victims, supplementing US$25 million in insurance payouts available for wrongful death, personal injury, property damage, fire suppression, and environmental impact.
Critics say the cleanup alone will exceed US$25 million.
Keach said he expects to formalize a process for selling the railroad in the coming weeks, and he remains optimistic that a deal can be struck by 1 Jan 2014.
"It's moving as I would expect. Everybody involved in the process thinks it should be, and can be, completed by year's end," Keach said.
There's a possibility, however, that regulatory approvals in the two countries could take longer than that, pushing the sale into early 2014, he added.
Editor's Note: Article abridged, repetitive derailment data removed.