PORTLAND, Maine — Some victims of the train disaster that killed 48 people in Lac-Megantic, Quebec, on July, 6, 2013, will again be able to file claims against as many as 25 defendants before the statute of limitations for those claims expires.
U.S. Magistrate Judge John Nivison on Thursday allowed lifting a stay on claims in the case, reopening the door for victims to get claims against defendants on the books and preserve their right to pursue those claims in court.
Robert Keach, trustee for the estate of the bankrupt Montreal, Maine and Atlantic Railroad, said Thursday during federal court proceedings in Portland that the families of 20 victims have signed on to the settlement that could deliver to them about $77 million (Canadian) as early as August.
Keach said another 28 victims did not file claims in the case before the stay was ordered. Starting June 8, those victims will have an opportunity to file their claims to preserve their right to legal recourse beyond the two-year deadline.
Keach said those claims will be filed in Cook County, Illinois, where Montreal, Maine and Atlantic’s majority owner at the time of the crash, Rail World Inc., is headquartered.
Keach said the total settlement from 23 of 25 defendants in the case has reached about $300 million (Canadian). He said he hopes the reopening of claims could provide “an additional incentive” for the remaining defendants to settle. The funds would be distributed to victims according to a point system, per a plan released in April.
The settlement arrangements are moving ahead in tandem in Canada and the United States, with a confirmation hearing set for Aug. 20 to consider approving the U.S. settlement agreement. The plan in Canada could be approved as early as June 17, Keach said.
He said the two parties that have not yet settled in the case are the Canadian Pacific Railway Co. and World Fuel Services Corp.
The hearing Thursday was prompted by attorneys appointed earlier in the bankruptcy process to represent the interests of the victims in Quebec, as the wrongful death claims were pursued in the United States, while some of the property damage claims have moved forward in Canada.
The attorney for that committee, Paul Hastings, argued in a motion to extend the stay in the case that the move was driven by a desire of attorneys representing the victims to collect more fees.
Hastings wrote that most of the retainer agreements for plaintiffs called for attorneys to receive a fee of 40 percent on any settlement approved after the filing of a formal complaint. Jeffrey Sternklar, an attorney representing victims in the case, disputed that the motion was not about collecting contingency fees in the case.
Nivison said that he did not have enough information in the case to make a determination about the contingency fees and their timing in relation to a settlement agreement.
The stay was initially in place upon agreement of all the parties in the case, in the interest of focusing on a settlement in the complex case without parties pursuing individual claims at the same time. Nivison said that stay was premised on that agreement among the parties and not the court’s authority.
Without that agreement, Nivison ruled, the stay should be lifted to allow claims to be filed before the two-year July 6 deadline.
Keach said it’s expected that another stay will be requested once those additional claims are filed as he tries to bring the last remaining defendants into a settlement agreement with more of the victims.
Sternklar said the settlement would result in less money for the victims than pursuing individual claims against “well-heeled” defendants, but resolution will come sooner.
“They are accepting this settlement that gets them less than what they’d get in litigation — in their view — because it gets it to them faster,” Sternklar said.