Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Trustee in Maine Railroad Company Case Deals with Complex Issues
Author: Joel R. Glucksman
Date: September 3, 2013
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A bankruptcy trustee has been appointed by the Office of the U.S. Trustee to manage the debtor Montreal, Maine, and Atlantic Railway in its bankruptcy case, as the railroad company becomes embroiled in a number of legal issues.
The company filed for Chapter 11 bankruptcy protection, only a month after a runaway train owned by the railroad derailed in the small town of Lac-Megantic, Quebec. The crash caused an explosion that claimed 47 lives and has led to a wave of criticism about the management of the company. In the wake of this disaster, Robert Keach has been appointed to serve as the trustee in the case, and he recently discussed its complexities that may factor into proceedings and its reorganization plan.
Although no decisions have been made as of yet, Keach said he is currently examining the company’s finances and determining whether another railroad company will be tapped to operate MMA’s network, or whether the railroad’s assets will be sold, according to the Bangor Daily News. Currently, deciding whether to appoint another railroad to take over the company’s operations has been a hot topic.
“I know there’s been talk about that, but based on the information I’ve been able to gather over the last three days, the financial circumstances don’t warrant that kind of decision right now,” Keach said, according to the newspaper. “While I think a sale of the railroad will certainly be explored, I think it’s highly unlikely someone will be appointed to run this railroad. Right now we’re running this railroad and I don’t expect that to change in the short run.”
The management structure of the railroad has been in contention after the discovery that it only relies upon single-person train crews, rather than the widely adopted practice of two-person train crews. However, there is no indication of whether this will be a factor in the trustee’s decision to appoint another company to manage operations.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
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