Skip to main content

In this July 6, 2013 file photo, smoke rises from railway cars carrying crude oil after derailing in downtown Lac Megantic, Que.

Paul Chiasson/THE CANADIAN PRESS

Canadian Pacific Railway is willing to drop its appeal of the $450-million settlement fund for victims of the Lac-Megantic tragedy if it is granted certain legal protections, lawyers said Tuesday.

Lawyers for Montreal Maine and Atlantic Railway Ltd., the now-defunct company responsible for the derailment that killed 47 people on July 6, 2013, tabled a motion earlier this week to change conditions of the fund.

If a judge accepts the modified conditions, Canadian Pacific will withdraw all its objections to the fund in Canada and in the United States.

Story continues below advertisement

That would allow victims of the disaster to start receiving their portion of the $450-million payout before the end of the year, said Andrew Adessky, the court-appointed monitor for MMA's bankruptcy proceedings.

While a judge is scheduled to hear the motion Thursday morning in Granby, 80 kilometres east of Montreal, the proceedings could be postponed.

Jeff Orenstein, the attorney representing the victims, said the lawyer for the city of Lac-Megantic has officially asked for the hearing to be put off in order for him to have more time to review the motion's wording.

Orenstein said he also might need more time.

"We just got (the motion) and we are studying it," he said.

Orenstein also cited the motion as saying CP has expressed a willingness to drop its appeal.

CP has been the only company accused in the derailment to not participate in the settlement fund and over the summer it filed motions to appeal a judge's decision approving the money for victims and creditors.

Story continues below advertisement

All the companies that offered money were to be released from legal liability for the derailment.

CP objected to the fund because it said it wasn't responsible for the disaster and it wouldn't be able to properly defend itself if it was taken to court by any of the firms released from legal liability or by other victims and creditors.

MMA's new motion seeks to clarify CP's legal obligations if the Canadian company is taken to court, loses, and is ordered to pay money for the derailment.

The motion "clarifies their rights, should someone pursue legal action and succeed in obtaining a judgment against them," Adessky said.

"This kind of clarifies certain (monetary) reductions that they are entitled to by virtue of how the (settlement) plan functions."

CP did not return a request for comment.

Story continues below advertisement

On July 6, 2013, an unmanned train owned by MMA roared into Lac-Megantic and derailed, with its cargo exploding and decimating part of the downtown core.

MMA didn't have enough insurance to pay damages to victims and creditors, so it filed for bankruptcy in the United States and Canada. The settlement fund is tied to the bankruptcy proceedings on both sides of the border.

A judge in Canada has already accepted the terms of the fund, while a U.S. judge is expected to rule on the acceptability of the fund Friday.

Adessky said the only party to object to the terms of the fund on either side of the border was CP.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter