PORTLAND, Maine — The families of those killed in the disastrous 2013 oil train crash in Lac-Megantic, Quebec, will be offered a settlement delivering to them a collective $85.7 million ($111.2 million Canadian) for damages.
A bankruptcy judge on Thursday approved details of the plan outlining how all creditors in the case will be reimbursed, including a point system for compensating the families of victims and others who experienced the massive explosion and fire in the Quebec hamlet’s downtown.
About 4,000 claimants have wrongful death, moral damages and personal injury claims against the bankrupt Montreal, Maine and Atlantic Railway and other defendants, with proposed payments of $123 million ($160 million Canadian) to settle all of those claims.
The $85.7 million is proposed to settle the wrongful death claims and another $37.6 million ($48.8 million Canadian) would be paid to those with moral damages and personal injury claims, according to court records.
The compensation plan came before the court after a Canadian court cleared the way for the settlement related to wrongful death claims of 47 people who died in the accident or as a result of trauma directly related to the accident.
The unmanned train had careened at night into the town of Lac-Megantic after hand brakes were not properly set. The crash prompted tougher regulatory standards in Canada and the United States on transporting oil by rail, which has surged as new harvesting techniques have made possible more domestic oil production.
The Canadian Pacific Railway had challenged the settlement terms in Canadian court, arguing it was not within the court’s jurisdiction to approve the settlement.
The railway, which said it is not responsible for the disaster, is now the only company being threatened by the class action. It is the only defendant — of 25 — not to settle and contribute to a fund of about $332 million ($431 million Canadian).
The approval in court Thursday allows the settlement plan and disbursement to move forward, with votes by the victims and other creditors to take place by a Sept. 10 deadline, according to court documents.
The distribution plan in the wrongful death claims of the 48 victims calls for compensation ranging from payments of $478,000 (0.43 percent of the settlement) to $5.3 million (4.8 percent), based on a point system that factors in the age of the victim, the age of surviving children and spouse and other conditions.
U.S. Bankruptcy Judge Peter Cary set a hearing for Sept. 24, at which the settlement voting results will be considered for approval.
Montreal, Maine and Atlantic Railway Trustee Bob Keach said Monday that victims of the crash could be paid as soon as this fall.
Reuters contributed to this report.