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Compensation should flow soon to Lac-Mégantic victims

Ghislain Tanguay looks for his friend Richard Veilleux's name on a memorial dedicated to the victims of the tragedy, in Lac Megantic, Quebec July 5, 2015

Christinne Muschi/The Globe and Mail

Victims of the 2013 Lac-Mégantic tragedy should begin to see some money by the end of the year now that Canadian Pacific Railway Ltd. has agreed to stop blocking the $446-million compensation fund.

A U.S. bankruptcy judge in Portland, Me., on Friday approved the settlement, and a Quebec judge is expected to do the same by Tuesday, after the Calgary-based railway dropped its legal fight against the process under which the fund was created in exchange for reduced potential liability in the future.

"It allows the settlement funds to start flowing pretty much right away," said Andrew Adessky of Richter Consulting, the court-appointed bankruptcy monitor for the Montreal Maine and Atlantic Railway in Canada.

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The fund is part of the bankruptcy proceedings of MM&A, which was hauling the oil train when it exploded in Lac-Mégantic, Que., on July 6, 2013, killing 47 people and reducing the town to ruins.

Robert Bellefleur, a member of a Lac-Mégantic-based coalition that promotes rail safety, welcomed the judge's approval.

"It's good news for people who were hit hard, who lost loved ones, homes, businesses," said Mr. Bellefleur, who knew about 25 of the people who were killed, including his cousin's son, his daughter's two babysitters and his contractor.

"It's very good news. It doesn't replace lives. It will provide comfort and maybe enable people to get back on their feet and live a more normal life, but without ever forgetting what happened."

Canadian Pacific, which carried the crude oil from North Dakota to Montreal, where it was taken over by MM&A, says it played no role in the disaster, and is not among the roughly two dozen companies that contributed to the settlement.

"CP said right from the start it wasn't our train, it wasn't our locomotive, it wasn't our tracks, it wasn't our product, it wasn't our crew," said Martin Cej, a CP spokesman.

In its legal case, the railway argued that the Quebec court that handled the settlement did not have jurisdiction over the issue and that the agreement would have exposed the company to massive liabilities in future lawsuits over the Lac-Mégantic tragedy.

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But it recently dropped its objection after bankruptcy trustees clarified the agreement's language to ensure CP's liability in any future lawsuit it lost could be reduced by the amount of the settlement approved on Friday.

"It doesn't shield [CP] from being sued in connection with the derailment. The people who contributed to the settlement fund … are protected from any and all litigation in connection with the derailment. CP is not a settling party and they are not protected from future lawsuits," Mr. Adessky said.

The settlement sets aside $111-million for 48 wrongful deaths, including a firefighter who died by suicide in the aftermath of the derailment. Other claimants will include people who suffered traumatic stress, or lost their homes or businesses, and lawyers.

The contributors to the settlement include ConocoPhilips Co., Shell Oil Co. and Irving Oil Ltd., which owns the New Brunswick refinery that was the intended destination of the train.

Contribution amounts are not publicly available, although Irving said it gave $75-million. World Fuel Services Corp., the Miami-based company that owned the fuel, paid $135-million.

With a report from Associated Press

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