The bankruptcy trustee for Montreal Maine & Atlantic Railway Ltd said that a recent reorganization plan — filed by families of people who died when one of the company’s trains derailed and exploded — is “not a serious plan.”
Robert J. Keach, the trustee, said that the plan, filed in U.S. Bankruptcy Court in Bangor, Maine on January 29, “will go nowhere” and is “facially non-confirmable,” according to Bloomberg News.
A group of wrongful-death claimants submitted the plan, which would allocate 75 percent of $25 million in insurance to the families of people who died in the July accident in Lac-Megantic, Quebec. Claimants seeking compensation for property damaged in the derailment and subsequent fire would receive the other 25 percent.
Keach said that the plan relies on the assumption that insurance proceeds, a Canadian asset, could be transferred to the United States. An attorney for the official victims’ committee said that proceeds from the Canadian insurance policy would not be turned over to a U.S. court without an agreement between both countries’ courts.
Keach also said the plan would be a bad deal for the majority of claimants. He said the plan was proposed by a “splinter group” not participating in the official victims’ committee, and that it was a tactical move related to their resistance to Keach’s plan to move the wrongful death lawsuits from Illinois to Maine.