SHERBROOKE, Que. — A lawyer representing the now-defunct railroad involved in the Lac-Megantic train derailment urged a Quebec Superior Court judge to approve what he called a "just and reasonable" settlement fund for victims and creditors.
Patrice Benoit told the court Wednesday that 25 companies accused of responsibility in the July 2013 tragedy that killed 47 have put up a combined $431.5 million in a settlement fund, unanimously accepted by those in Lac-Megantic during a June 8 meeting.
Justice Gaetan Dumas is hearing arguments about whether he should accept the fund to compensate victims and creditors of the disaster that occurred when an unmanned train owned by the Montreal Maine and Atlantic Railway Ltd. roared into town and derailed, with its cargo exploding and decimating part of the town's downtown core.
If accepted, the companies that offered money will be released from all legal liability for the derailment in both the U.S. and Canada.
MMA didn't have enough insurance to pay damages, so it filed for bankruptcy in the U.S. and Canada. As part of the insolvency proceedings, the companies accused in the derailment are offering money to victims in exchange for releases from liability.
"If we didn't do (the settlement) this way MMA would have gone bankrupt and there would be many lawsuits that would have lasted years," Benoit said.
The only accused company not to offer money for the fund is Canadian Pacific Railway Ltd., whose lawyers are expected to argue later Wednesday that the fund is unfair because it releases other firms from liability.
It has also challenged the legitimacy of the bankruptcy process, arguing Quebec Superior Court is not the proper venue for such a hearing.
Canadian Pacific has said it doesn't dispute that families of the victims deserve compensation but argues it is not one of the firms responsible for what happened.
Benoit said if Dumas approves the settlement fund and there are no further appeals, cheques should start arriving in the fall.
