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Lac-Megantic fund approved
The legal liability of the deadliest North American accident involving rail transportation of crude oil has been set at C$446 million with a United States bankruptcy judge approving a settlement fund, primarily for families of 47 people who were killed when a train derailed and exploded in the Quebec town of Lac-Megantic.
Judge Peter Cary in Portland, Maine, delivered the verdict Oct. 9 after Canadian Pacific Railway dropped its objection to the plan. A Canadian judge had given conditional approval to the plan Oct. 8.
The settlement, which drew praise from Cary for the speed with which it was reached, involved negotiations with more than 20 companies that carry potential liabilities.
Unless there are any unexpected setbacks , payments could start flowing to the plaintiffs later this year, with about C$110 million being earmarked to settle wrongful death claims.
In addition the money will be used to compensate government departments and agencies and others for destruction and environmental damage.
Bankruptcy trustee Robert Keach said that “within the limits of the civil system, this is substantial compensation for the victims and they deserve it.”
CP Rail still an issue The accident occurred July 6, 2013, when an unmanned runaway train hauling 72 tankers of Bakken crude from North Dakota to the Irving Oil refinery at Saint John, New Brunswick, left the tracks wiping out much of the town center in Lac-Megantic.
The tankers were originally hauled on tracks owned by CP Rail before being turned over to Montreal, Maine & Atlantic, which has since filed for bankruptcy.
The settlement fund is tied to those bankruptcy proceedings in the United States and Canada.
Although CP Rail argued it could not be held responsible for a train that was operated by MM&A crew on that company’s rail, Keach argued CP Rail bore some responsibility for failing to properly classify the Bakken crude, which was rated as matching the volatility of gasoline.
The settlement was amended to take into account the full amount paid by others if CP Rail is ultimately ordered to pay damages.
A CP Rail spokesman said that although his company was not at fault in the derailment it has worked “with the trustee for a solution that protects CP interests and allows payments to be made to victims as soon as possible.”
- GARY PARK
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