A MMA train passes the Farnham station - Date/Photographer unknown.
18 December 2013
Rail Service Resumes in Lake Megantic as Judge OKs Auction of Railroad
Bangor Maine USA - As the first trains rolled into Lake Megantic a federal bankruptcy judge approved bidding procedures Wednesday for the auction of the Maine-based railroad that owned the train.
The action in a courtroom in Bangor came on the same day the first Montreal Maine & Atlantic Railway's (MMA) trains rolled into Lake Megantic since the disaster.
Trustee Robert Keach said the goal is to sell the railroad's operations in Maine and Canada in a way that allows the rail service to continue.
Any proceeds from the company's sale would be used to repay creditors and victims, supplementing $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 $25 million.
There's already a "stalking horse" bid of US$14.25 million from Railroad Acquisition Holdings LLC, which is affiliated with Fortress Investment Group, a publicly traded investment company.
But there are more than a dozen interested buyers and there could be additional bids at next month's auction.
Keach said all potential bidders have been queried about their operational plans.
The goal is to get the best price to recoup losses and to retain the rail line, he said.
Before Wednesday, there had been only a couple of test trains running into town, and Mayor Colette Roy-Laroche said the restoration of rail service will happen slowly.
No dangerous substances will be transported through the town, she said.
Roy-Laroche told reporters in Canada earlier this week that psychological aid will be available for people traumatized by the return of the trains.
The timetable approved by the bankruptcy judge Wednesday puts the U.S. case on the same timetable as a companion case in Canada that covers the railroad's assets there.
It calls for competing bids for the company's assets to be submitted by 17 Jan 2014 with the auction beginning 21 Jan 2014.