Victims' families object to Quebec committee's quest for role in MMA bankruptcy

MONTREAL – The families of several victims of the deadly rail crash in Lac Megantic are opposing a Quebec committee’s bid for official standing at a railway’s bankruptcy proceedings in the United States.

The families of 18 victims of the July 6 derailment and explosion told a U.S. court in Maine that they object to the Quebec group’s efforts to be appointed as an official creditors’ committee representing the provincial government, the municipality and some wrongful death and personal injury claimants, along with those who had property damage.

“The families who lost loved ones believe they have specific interests that should be defended by their own committee,” their lawyer Daniel Cohn said in an interview.

“They welcome help from the government, but they understand that it could (use compensation) for cleaning environmental damage. They want their fair share.”

Objections have also been filed from various other parties, including the court-appointed trustee overseeing Montreal Maine & Atlantic’s bankruptcy. A hearing is set for Oct. 1 in Bangor, Maine.

The Quebec government appointed Luc Despins, a bankruptcy specialist with standing in New York State, in August to make representations on behalf of the creditors’ committee.

In his motion, he urged the judge to recognize the committee that represents creditors with the “largest claims” against the railway and the “entire spectrum” of victims.

“I want to be very clear: there is no animosity among the Quebec government, the City of Lac Megantic and the victims,” Despins said in an interview Tuesday. “Quebec has already said that victim compensation was the priority.”

The trustee said the appointment is unnecessary because it represents the interests of all creditors, including the victims and those who filed class-action suits in Illinois. More than 20 lawsuits were filed after the derailment asserting claims.

Recognizing the committee would unnecessarily increase administrative costs of the case and “sap what limited resources of the debtor exist,’ wrote Robert Keach.

Family members said a committee with such wide interests wouldn be “dysfunctional by definition.”

It added that government is prevented by the bankruptcy code from serving on official creditors’ committees and can represent their own interests.

Governments also have the right to assert a first priority lien on MMA’s Canadian real estate to secure clean-up costs. But the families said it is unlikely in the Chapter 11 case for the governments to give priority to the cost of cleaning up a foreign debtor’s property in another country.

The killed 47 people and destroyed much of the centre of the picturesque Quebec town after the unmanned, runaway train derailed and exploded.

The crude oil that exploded in Lac Megantic was as volatile as gasoline, but was documented as a less-dangerous product akin to diesel or bunker crude, the Transportation Safety Board said.

The investigation into the crash continues.

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