Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Railroad Company Involved in Deadly Explosion Seeking Bankruptcy Protection
Author: Joel R. Glucksman
Date: August 20, 2013
Key Contacts
Back
Railroad company Montreal, Maine & Atlantic Ltd., which has recently been in the media spotlight for causing a deadly explosion in Quebec, is seeking bankruptcy protection under Chapter 11 in both the United States and Canada.
Earlier in July, a parked train carrying 72 tankers full of crude oil began rolling downtown in the small Quebec town of Lac-Megantic and eventually derailed, causing a fire and explosion that killed 47 people. Since the deadly explosion, the company has experienced significant service delays and disruptions that has indebted it to more than 200 creditors, the company said in its bankruptcy filing.
In addition, the railroad company, which is based in Maine, said that costly lawsuits and clean-up costs associated with the fatal explosion have only exacerbated its financial difficulties. The company also noted that in the one month following the disaster, its monthly revenue for its Canadian and U.S. units fell to $1 million.
The company sought protection in the U.S. Bankruptcy Court in Maine, as well as in Canada, noting that filing in both countries would help preserve the value of its assets for a potential sale, Reuters reports.
“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 at Lac-Megantic,Quebec, on July 6,” MMA Chairman Ed Burkhardt said in a statement.
Despite the company’s financial instability and bankruptcy filing, Canadian authorities say they will push to ensure that the railroad company meets its obligations to the town that was impacted by the explosion.
“This announcement does not mean that MM&A is off the hook for their responsibilities to the people of Lac-Megantic,” Ashley Kelahear, a spokeswoman for Canadian Transport Minister Lisa Raitt, said in an email to Bloomberg. “We will work with the Province of Quebec to ensure that the cleanup continues and that the people of Lac-Megantic continue to receive the support they need.”
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Author: Sean M. Pena
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Author: John D. Giampolo
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: Sean M. Pena
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.