PORTLAND, Maine — Victims of the massive oil train crash in 2013 that killed 48 people in Lac-Megantic, Quebec, should see their portion of a $445 million (Canadian) settlement by the end of this year, according to a bankruptcy trustee for the bankrupt Montreal, Maine and Atlantic Railway.
U.S. Bankruptcy Judge Peter Cary on Friday morning confirmed the railroad’s Chapter 11 bankruptcy plan, which includes approximately $111 million to compensate wrongful death claims and $334 million for other damage claims connected to the July 2013 crash.
A portion of the settlement amounts will go toward legal fees.
Cary said Friday he was impressed by the final settlement amount and speed of the case.
“There will be payments within two years and five months of the date of the accident,” Cary said, referring to a timeline described by the railroad’s bankruptcy trustee, Robert Keach. “Given how litigation can move, that is impressive.”
The parties released from liability for wrongful death claims and other damages in the settlement included Shell Oil Co., ConocoPhillips, Irving Oil Ltd., World Fuel Services Corp., insurers and rail car companies.
Keach said after Friday’s hearing that the bankruptcy case was unique for the coordination between the U.S. and Canadian court process.
The bankruptcy process also allowed for consolidated settlement to come together faster than through other legal avenues, he said.
“There’s no other legal structure I know of that would get [victims] this much money this fast,” Keach said. “No amount of money will fully compensate them, but within the limits of the civil system, this is a substantial amount of money.”
The bankruptcy case for the Hermon-based railroad spanned an international border and involved claims against a variety of suppliers and others connected with the operation of the 72-car oil train that careened unattended into downtown Lac-Megantic on the night of July 6, 2013.
A Transport Canada investigation found the train’s lone conductor did not set enough handbrakes before leaving the train that night on a hill about 8 miles west of Lac-Megantic. The crash killed 47 people, and a Canadian judge determined the accident caused another man’s later suicide.
The bankruptcy plan approved Friday still needs a final stamp of approval from a Canadian judge, who conditionally approved terms of the bankruptcy plan Thursday.
“In our view, the rest is just procedural,” Keach said after Friday’s hearing in Portland.
Parties last week cleared the path for confirmation of the bankruptcy plan, making changes requested by Canadian Pacific Railway, which did not participate in the settlement. Canadian Pacific sought and got specific judgment reduction provisions, specifying how it can reduce claims against it based on what has already been paid through the settlement with others and from the railroad’s $25 million insurance policy.
Canadian Pacific’s decision not to settle in the case means it could face claims from victims and others for any liability in the crash. Keach said the bankruptcy estate will file claims against Canadian Pacific.
Separately, the Canadian government has filed charges against the railroad and eight people in connection with the accident for alleged violations of Canada’s federal railway safety laws.
The distribution plan in the wrongful death claims of the 48 victims calls for compensation ranging from payments of $478,000 (Canadian), or 0.43 percent of the settlement, to $5.3 million, or 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.
The payment to the victims amounts to about $85.5 million U.S. dollars, and the entire settlement amount totals about $342 million in U.S. dollars.
Cary thanked the parties involved in the complex case Friday.
“Without your efforts this case could have languished, and you’ll find that justice delayed is justice denied,” Cary said.