Quebec government seeking $400 million for Lac-Megantic rail disaster cleanup

Quebec's Minister of Justice Stephanie Vallee
MATHIEU BELANGER | Reuters
Quebec's Minister of Justice Stephanie Vallee
Posted June 16, 2014, at 5:53 p.m.

PORTLAND, Maine — The government of Quebec is seeking $409 million Canadian from the bankrupt Montreal, Maine and Atlantic Railway for cleanup and reconstruction in the town of Lac-Megantic, where one of the company’s trains carrying oil crashed last year in an accident that killed 47 people.

The tragedy occurred early in the morning of July 6, 2013, when a runaway Montreal, Maine and Atlantic Railway train hauling 72 tanker cars of crude oil smashed into the town’s center, derailed and exploded.

Quebec Justice Minister Stephanie Vallee said in a statement Monday that the province has already spent $126 million in Canadian dollars for the cleanup effort and expects to spend another $283 million to clear wrecked buildings and decontaminate the oil-soaked soil around the site of the crash.

Robert Keach, the rail company’s U.S. bankruptcy trustee, said in an email to the Bangor Daily News that the claim has no impact on the company’s sale.

The Wall Street Journal reported that Andrew Adessky, the court-appointed monitor for the company’s bankruptcy proceedings in Canada, said more claimants may still come forward in the case.

The company’s U.S. operation was sold to the New York-based Fortress Group in a $15.85 million deal that closed in May. John Giles, president and CEO of the renamed Central Maine and Quebec Railway, said at the time that the company plans to invest about $10 million in track upgrades and make other improvements before the company again starts shipping crude oil.

Other companies such as Irving Oil also are facing lawsuits seeking to reclaim expenses and compensation costs from the disaster. Vallee said in her statement that any successful claims against the company should benefit victims of the disaster and their families. The company has an insurance policy that could make $25 million in Canadian dollars available to claimants.

A federal bankruptcy judge in April rejected a proposal that would have allowed former U.S. Sen. George J. Mitchell to oversee the distribution of insurance funds in the Montreal, Maine and Atlantic Railway’s bankruptcy case to the estates of the 47 people killed in the Lac-Megantic railroad disaster. A Boston attorney representing Chicago attorneys who filed wrongful death claims, said in April that he planned to refile the plan this month in hopes of having it reconsidered.

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