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Railway company in Quebec crash files for bankruptcy

Montreal, Maine & Atlantic cites potential liability costs

The railroad company involved in last month’s deadly Canadian train crash has filed for bankruptcy. 

On July 6, an unattended parked train packed with crude oil tankers rolled downhill into a Quebec town, derailed, crashed and exploded, killing 47 people. The train’s operator, Montreal, Maine & Atlantic Railroad Ltd. (MMA), has come under legal fire for the disaster; it’s been named in at least two lawsuits related to the accident. The company is also refusing to cover the nearly $8 million tab to clean up the debris and oil that covered the Quebec town after the disaster.

Yesterday, MMA filed for bankruptcy protection in the U.S. and Canada, saying the deadly disaster forced it to file. 

“It has become apparent that the obligations of both companies now exceed the value of their assets, including prospective insurance recoveries, as a direct result of the tragic derailment,” Chairman Edward Burkhardt said in a statement.

MMA listed assets of as much as $100 million and liabilities of up to $10 million in its filing.

 

Read Bloomberg and Reuters for more about MMA’s bankruptcy filing.

For more InsideCounsel stories about the Canadian train disaster, read: 

11 companies targeted in Quebec train disaster suit

Quebec train disaster spurs wrongful death lawsuit

 

And for more bankruptcy news from InsideCounsel, read: 

Cost-cutting bankruptcy guidelines expected by July 1

Electric-car maker Coda files for Chapter 11 bankruptcy

American Airlines files plan to exit bankruptcy

Bankrupt pharmacy linked to meningitis outbreak wants to redeem insurance policies to pay creditors

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