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Rail News: Short Lines & Regionals

Wrongful death claimants in Montreal, Maine & Atlantic derailment case craft plan, choose lead negotiator


Chicago law firm Meyers & Flowers yesterday announced the Unofficial Committee of Wrongful Death Claimants in the Montreal, Maine & Atlantic Railway (MMA) Chapter 11 bankruptcy case has filed a plan and installed former U.S. Sen. George Mitchell as the plan fiduciary.

MMA filed for bankruptcy protection in August 2013 after its train carrying crude oil derailed in Lac Mégantic, Quebec, on July 6, 2013, setting off an explosion that caused 47 deaths. A bankruptcy court has approved the sale of the railroad, with the closing expected in March. Florida Great Lakes Partners, a Fortress Investment Group partner, submitted the winning bid at an auction held Jan. 21 in Portland, Maine.

Currently, no money is set aside for accident victims, said officials at Meyers & Flowers — which represents the claimants — in a press release. Insurance coverage of at least $25 million is available, and negotiations are continuing with the insurance company and other stakeholders, they said.

A Democrat who served as a senator from Maine from 1980 to 1995, Mitchell is renowned for his leadership in bringing opposing parties together and hopefully can bring about a consensual negotiation of all outstanding issues for claimants, Meyers & Flowers officials said. He helped broker a peace agreement in Northern Ireland, which earned him the Presidential Medal of Freedom, and was instrumental in Middle East peace negotiations, they added.

"Knowing of Senator Mitchell's record in this regard, we think he can help break the bankruptcy logjam," said Peter Flowers, a Meyers & Flowers partner.

The proposed plan calls for the insurer to settle the claims or turn over a portion of the policy proceeds to MMA's bankruptcy estate. Insurance proceeds would be distributed as follows: 75 percent for wrongful death and personal injury claims paid through the Chapter 11 case, and 25 percent for property damage claims covered by the Canadian insolvency proceeding of MMA's Canadian subsidiary.

"The idea is to get this done quickly by dividing responsibility between the U.S. and Canadian cases rather than have a tug of war," said Flowers.