A Montreal Maine & Atlantic train stopped on a siding - Date/Photographer unknown.
7 October 2013
Lake Megantic Railway (MMA)
Could be Sold by December
Lake Megantic Quebec - Court-appointed officials say the sale of the insolvent railway involved in last July's deadly explosion and fire in Lake Megantic could be wrapped up in mid-December once a formal process is established to award compensation to victims and other claimants.
Court filings in Quebec say the U.S. trustee is entertaining interest from eight potential buyers for the Montreal Maine & Atlantic Railway (MMA).
The Canadian monitor, Richter Advisory Group Inc., has been in contact with at least two groups in Canada.
Court officials declined to identify the interested parties, but the transportation subsidiary of conglomerate Irving on Canada's East Coast says it continues to evaluate the deal.
"We're considering all of our options," said Mary Keith, a spokeswoman for J.D. Irving, operator of the NB&M Railways.
The proposed sale schedule, which must be approved by the Quebec and U.S. bankruptcy courts, would see 31 Oct 2013 as the deadline for expressions of interest from potential bidders.
A lead bidder would be chosen 15 Nov 2013 that would set a floor price for other bidders. A formal auction of qualified bidders would take place 13 Dec 2013.
Interested buyers would be able to bid on the railway's total assets or just those in Canada or the U.S.
However, potential buyers must be prepared to continue providing service to customers in Quebec, Maine, and Vermont.
MMA Customers Want Service
Dozens of MMA's customers wrote letters stating that an end of railway services would "have significant financial consequences and would result in job losses in the regions and the closure of various companies." A recent survey of businesses by regional economic development agencies determined that 700 jobs and investments totalling $20 million would be at risk if the railway is shut down.
The officials said they hoped a formal claims process will be approved by the courts by 30 Nov 2013.
MMA's American assets have been estimated at between US$50 million and US$100 million while the Canadian assets were pegged at about $18 million. Proceeds from the sale would also be complemented by a $25-million policy from XL Insurance.
Insurer Wants Out
Meanwhile, Travelers Property Casualty Company of America, which has paid US$250,000 to repair the damaged track in Quebec, is trying get out of the rest of its US$7.5 million coverage for the railway.
A hearing on the issue is scheduled for Wednesday in Maine, with officials hopeful that a formal claims process will be approved by the courts by 30 Nov 2013. Thousands of claims are expected to be filed, according to the monitor's third report.
Meanwhile, Camden National Bank has approved a US$3 million line of credit secured by the railway's U.S. assets to support ongoing operations. However, the funds wouldn't be enough for necessary track repairs or to pay lawyers and other professionals involved in the court proceedings.