Thursday, January 23, 2014

The Rail Company that Decimated the Town of Lac Megantic Quebec Sold at Auction

On January 21, 2014, Montreal, Maine and Atlantic (MMA) Railway was sold at auction to a subsidiary of a New York City-based investment management company. On August 8, 2013, the train company that killed 47 people and leveled 30 buildings in the tiny town of Lac Megantic Quebec, filed for Chapter 11 bankruptcy.

On July 6, 2013, the unattended train comprised of 72 oil bearing tanker cars derailed and exploded decimating the town and ruining the lives of many in the small community.

Railroad Acquisitions LLC, a subsidiary of Fortress Investment Group, won the closed-door bidding for MMA Railway with a bid of just over $14 million.

More than a dozen companies expressed interest in the bankrupt company, which owns about 500 miles of track in Maine, Vermont and in Canada.

While the sale may keep the rail line in operation, it may also help to repay creditors and victims. The $25 million in insurance payouts was grossly inadequate and does not even cover the cost of the cleanup not to mention lawsuits associated with wrongful death, personal injury, property damage, fire suppression and environmental impacts.

© 2014, Richard Matthews. All rights reserved.

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