BANGOR, Maine — A federal bankruptcy judge on Wednesday approved the process by which the Montreal, Maine and Atlantic Railway’s assets will be sold at auction — the same day freight trains rolled through Lac-Megantic, Quebec, for the first time since a runaway MMA train caught fire and partially destroyed the town’s center, killing 47 people.
Robert Keach, the court-appointed trustee representing MMA, confirmed that U.S. Judge Louis Kornreich, during a hearing Wednesday in Bangor, approved his request to move forward with an auction for the railroad’s assets, which will take place next month.
According to Keach, Wednesday also marked the first day MMA trains returned to Lac-Megantic since the tragedy in early July when one of MMA’s trains rolled driverless down a hill before derailing in the middle of the town and causing an explosion. MMA filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Bangor a month later, on Aug. 7.
Lac-Megantic Mayor Colette Roy-Laroche told CTV News in Montreal that some residents are understandably nervous by the return of train service to town but that people understand it’s necessary for the town’s survival.
“We had a catastrophe, a veritable catastrophe, a huge catastrophe, which devastated our local and regional economy,” Roy-Laroche told the television station. “The return of train service, as I mentioned, is an important element to ensure that our economic crisis is not aggravated by an extended absence of shipping services.”
The auction for MMA’s assets, which is expected to be complete next month, began last week when Keach signed a sales agreement with what’s known as a “stalking horse,” a company that agrees to provide an opening bid. Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, was revealed as the stalking horse with a bid of $14.5 million.
All competing bids for the company’s assets will be due by Jan. 17, 2014, with the auction beginning Jan. 21, Keach told the Bangor Daily News last week. A joint hearing between the U.S. and Canadian bankruptcy courts will be held on Jan. 23 to complete the sale, Keach said.