Managers at bankrupt Maine railway could face layoffs

Posted Nov. 01, 2013, at 11:13 a.m.
Last modified Nov. 01, 2013, at 3:01 p.m.
Bob Grindrod
JOHN CLARKE RUSS | BDN
Bob Grindrod Buy Photo

HERMON, Maine — It doesn’t necessarily mean they will lose their jobs, but 32 workers who signed employee retention agreements could be laid off from the bankrupt railway that owned the runaway train that caused one of the biggest rail disasters in North American history.

The trustee appointed to operate Montreal, Maine and Atlantic Railway during proceedings in U.S. Bankruptcy Court in Bangor filed a motion through his attorney late last week to void “certain retention agreements” the 32 employees signed, court documents state.

The biggest name on the list is Robert Grindrod, the company’s president. The others appear to be management-level workers and their assistants.

Grindrod, who is still acting as the company’s president, referred comment Friday to attorney Robert Keach, the trustee for whom attorney Michael A. Fagone filed the motion. Keach and Fagone did not return messages seeking comment on Thursday and Friday.

Tied to salaries ranging from $48,800 to $171,900, the layoffs could save MMA about $2.4 million, the documents state. Company officials have said that the company has been struggling to operate since the July accident, in which 47 people were killed when the runaway train’s crude-oil tankers exploded in Lac-Megantic, Quebec.

“To the extent enforceable, the obligations under the [agreements] constitute an undue burden to the estate while providing no benefit,” the motion states. “Therefore, as a precaution, the Trustee has determined that rejecting the agreements is in the best interests of MMA and its estate.”

The agreements obliged the 32 workers to help the company operate during a potential sale of the company in exchange for half pay if the buyer offered them continued employment and full pay if the sale ultimately fell through.

The agreements appear to predate the bankruptcy proceeding.

Before the July 6 accident, Montreal, Maine and Atlantic Railway employed 109 people in the U.S. and 61 at its Canadian component. Fifty-eight U.S. workers and 16 Canadians were laid off after the accident because of the bankruptcy filing. Since the bankruptcy proceedings began, the company has rehired 15 U.S. and 13 Canadian workers, Keach has said.

The reconnection of the railroad tracks severed by the explosion should happen by Thanksgiving and the bankruptcy sale could happen in a few weeks, Keach said.

The bankruptcy proceeding is expected to last well into next year, although Keach has expressed hope that the families of the 47 victims can begin receiving compensation within several months. Several lawsuits on their behalf have been filed in Canada and the U.S.

Investigations into the accident’s cause, and railroad practices that might have contributed to it continue on both sides of the border.

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