Montreal, Maine & Atlantic survives

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Gets the court's protection from creditors


We could have guessed it three weeks ago.

The Montreal, Maine & Atlantic Railway is in serious financial difficulty. It is in danger of bankruptcy.

The railway began laying off employees - between 10 and 24 of them at first and then five more.

Not enough money to pay them.

Not enough either to pay subcontractors cleaning up the damage in Lac-Mégantic.

The town of Lac-Mégantic sent two formal notices requiring the MMA to reimburse the cost of cleaning the site of the tragedy, work valued at approximately $ 8 million.

Earlier, during his visit to the disaster site, company president Ed Burkhardt made a bad joke about the financial problems his company was having, saying he was a lot less rich than before the 6 July disaster.

Ha-Ha! Funny guy, that "Mister Ed" We forgot to laugh.

This week we learn even worse news. The company is close to bankruptcy, something it wants to avoid.

The MMA went to court in Montreal and was placed under the law for the protection from creditors, while lawyers for the company in the United States were preparing a similar legal action for a court in Bangor, Maine, the end of the line for the railway.

Judge Martin Castonguay said his decision in court in Montreal was so as to avoid "legal chaos" that could result from lawsuits filed by multiple creditors.

Now the company will have to make arrangements with its creditors to know how much they are willing to accept.

The judge said that the little the railway has done since the disaster of July 6, it is "lamentable."

The derailment resulted in the death of 47 people and the destruction of half the city of Lac-Mégantic.

The company lawyers told the court that it is facing a growing number of lawsuits, formal notices and mounting cleaning costs, which it expects will exceed $ 200 million. MMA has insurance to cover $ 25 million in claims and assets of only $ 18 million.

It could a decade to settle all the legal actions being prepared right now. We know who will finally end up paying.

Taxpayers are wondering today how the federal government can allow railway companies to operate with as little insurance.

Governments in many provincial jurisdictions require that ordinary car drivers have at least a million dollars in car insurance before they can drive on public roads. So why are entire trains on the tracks with so little insurance?




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