MMA Canada Granted Bankruptcy Protection by Quebec Court

In a judgment announced on Thursday, Quebec court allowed bankruptcy protection to the subsidiary of a U.S. railway company whose cargo train crashed into a tiny Quebec town causing death of 47 people. However, Judge Martin Castonguay added into his verdict statement that the Maine & Atlantic’s behavior is extremely “deplorable” and that he was not at all impressed by its management. Hence, explaining his judgment, Quebec Superior Judge stated that “this decision is to prevent legal anarchy.”

A petition for bankruptcy protection was filed by MMA in Canada and the United States on Wednesday, asserting that its revenues have clearly declined since the July 6 crash, making it impossible for the company to pay its burgeoning financial obligations. The company’s runaway crude oil train derailed in the small lakeside town of Lac-Megantic, Quebec, resulting in an explosion that caused huge fireballs and ended up destroying whole of the town’s core.

Meanwhile, officials of Canadian government declared on Thursday that they will do everything in their power to make the railway pay for the damage. Speaking on the matter, Quebec Health Minister, Rejean Hebert, announced that the provincial government is seeking a “privileged creditor” status in the bankruptcy, as it would assure it to receive payment from MMA before some other claimants. Speaking to a French-language RDI television, Hebert alleged that “we are assured of having a guaranteed creditor status which allows us to come before a few other people” and so “we’re going to use all the necessary legal procedures to go out and seek what we are due, both from MMA and the insurers.” 

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