The beleaguered railroad company engulfed in the deadly Quebec train derailment has officially filed for bankruptcy protection. In a statement issued by The Montreal, Maine & Atlantic Railway, it has announced to have filed for Chapter 11 bankruptcy protection on Wednesday in the U.S, along with its sister company in Canada, i.e. Montreal, Maine & Atlantic Canada Co., filing a petition in Quebec Superior Court in Montreal asking for relief under the Companies’ Creditors Arrangement Act.
In a press statement issued after the news, the chairman of both companies, Ed Burkhardt, stated that “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.” He added that “a process under Chapter 11 and the CCAA is the best way to ensure fairness of treatment to all in these tragic circumstances.”
The sister company in Canada is slapped with several lawsuits along with a mammoth cleanup costs demand in result of the deadly disaster. At the same time, the town and the Quebec government have drafted legal notices against the Maine-based railway, asking it to reimburse Lac-Megantic an estimated $8 million in environmental mop-up costs. Burkhardt stated that “MMA wishes to continue to work with the Quebec Ministry of the Environment, the municipality of Lac-Megantic, and other government authorities in the continuing environmental remediation and clean-up as long as is necessary, and will do everything within its capacity to achieve completion of such goal.”
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