A proposed settlement fund for victims of the fiery train derailment in Lac-Mégantic, Que., is nearly halfway to a goal of $500 million in funding commitments ahead of its filing next month, a bankruptcy trustee for defunct Montreal, Maine & Atlantic Railway said.
More than a dozen corporations that face potential liability in the oil train disaster that killed 47 people have agreed to pay over $200 million to the fund.
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That sum could more than double by the time judges in the U.S. and Canada sign off, bankruptcy trustee Robert Keach told The Associated Press.
Keach, the trustee in the Montreal, Maine & Atlantic Railways bankruptcy case, is casting a wide net as he seeks to build the fund to compensate victims. The names of contributors and other companies targeted for contributions are confidential, he said.
"We're very proud of the fact that we've gotten to $200 million. But we have a larger goal in mind, and we're going to continue to work for that," he told the AP.
First payments next spring
The proposed settlement will be filed by Jan. 12, a deadline for the bankruptcy proceedings in Canada, Keach said. He said he hopes the full settlement will be approved by late March or April, meaning the first payments could be made by the second anniversary of the disaster.
Much of downtown Lac-Mégantic was destroyed on July 6, 2013, by a raging fire caused when an unattended train with 72 oil tankers began rolling downhill toward the town of 10,000 people. More than 60 tankers derailed and several exploded. Forty-seven people died, and dozens of buildings were destroyed.
After filing for bankruptcy, Montreal, Maine & Atlantic was sold for $15.85 million but virtually all of that money went to repay creditors.
Keach said he's committed to getting as much money as possible for the victims.
"What's possible is a half-a-billion dollar fund. Will we get all the way there? That remains to be seen but that's the goal," he said.
A year ago, Keach sued World Fuel Services Corp., owner of the crude oil, and several other companies, accusing them of downplaying the volatility of the crude from North Dakota's Bakken shale region. Canada's transportation agency said the crude was roughly as flammable as unleaded gasoline.
World Fuel Services is presumed to be among the 20 or so companies targeted to contribute to the settlement. Keach also has asked for discovery documents from oil companies and subsidiaries including ConocoPhillips, Shell Trading U.S. Co., and Marathon Oil Corp.
Companies that choose not to participate in the settlement fund could be sued individually by victims. Wrongful death lawsuits are currently on hold pending the outcome of the settlement proposal.
Even if the settlement is approved, that wouldn't mean the end of the case.
Criminal charges are pending in Canada against three railway employees, including one accused of failing to set enough brakes on the train.
The railroad, meanwhile, is now under new ownership and has undergone upgrades totalling $10 million. The new owner, Central Maine and Quebec Railway, has resumed shipments of goods like propane and chemicals but the company has agreed not ship crude oil through Lac Megantic until 2016, company officials said.