Box cars owned by the Montreal Maine & Atlantic Railway sit idle next to the Pleasant River in Brownville, Maine - Jul 2013 Tom Bell.
25 June 2014
Canadian Regulators Approve Sale
of Bankrupt Maine Railway
Ottawa Ontario - Canadian regulators have approved the Central Maine & Quebec Railway's (CMQR) application to operate a railroad in that country, opening the way for the company to acquire the Canadian assets of the bankrupt Montreal Maine & Atlantic Railway (MMA).
The CMQR acquired MMA's assets in the United States on 15 May 2014 and has been operating on the U.S. side of the border since that time.
The sale of the Canadian assets was delayed until Canadian regulators approved a so-called "certificate of fitness", which they did on Tuesday.
Before operating a railroad in Canada a company is required to obtain that certification, which confirms that the company has adequate third-party liability insurance coverage.
John Giles, CEO of the new CMQR, and Robert Keach, trustee of MMA, could not be reached Wednesday for comment.
MMA operated about 500 miles of railroad tracks that connect Searsport, Millinocket, and Bangor with Montreal.
The company filed for bankruptcy in early August, a month after one of its trains was involved in a deadly derailment in the Quebec town of Lake Megantic.
The accident resulted in the deaths of 47 people and the destruction of most of the community's downtown area.
Keach signed a sales agreement in December with an affiliate of New York-based Fortress Investment Group to sell the railroad and its assets for US$15.85 million.
Initially, that asset purchase agreement set the sale for mid-March, but that date had been pushed back because of delays in filing the necessary paperwork with Canadian regulators.
An amended asset purchase agreement filed with the bankruptcy court 5 May 2014 claims that the sale of MMA's Canadian assets will close no later than five days after the Canadian regulators approve the certificate of fitness.
The proceeds of the sale will be used to pay the secured creditors in the case.