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Train Company That Blew Up Quebec Town Files for Bankruptcy

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Montreal, Maine & Atlantic Co. (MMA), the Maine-based railway whose train derailed and killed 47 people after sliding into the Quebec town of Lac-Mégantic and exploding a month ago, has filed for bankruptcy protection in the both the U.S. and Canada.

The company cited the closure of its main line between Quebec and Maine, the Associated Press reported.

The announcement came just a week after it came to light that Montreal, Maine & Atlantic had been subcontracted by Canadian Pacific Railway to deliver the 72 tankers full of crude from the Bakken oil fields in North Dakota to refineries in New Brunswick, Reuters reported. The disaster highlighted a dramatic increase in rail transport of crude oil that has gone unnoticed over the past several years.

Forty buildings were destroyed in the conflagration, which occurred after the unattended train, its brakes dismantled, rolled into the center of the 6,000-person town, derailed and exploded. As much as 36,000 barrels of oil spilled and was released into the air, mixed with the water and soaked into the ground, Reuters said.

The accident resonated in the Quinault Nation in Washington State, where the tribe is combating plans for similar rail-oil transport through traditional territory and ecologically sensitive areas.

RELATED: Lac-Mégantic Rail Tragedy Resonates in Quinault Nation as Victims Are Memorialized

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The bankruptcy filing came after Quebec authorities pressured the railway and World Fuel Services, which owned the crude, to reimburse the province for cleanup of the spilled oil, which has so far cost $7.8 million in Canadian dollars, Reuters said.

“It has become apparent that the obligations of both companies now exceed the value of their assets, including prospective insurance recoveries, as a direct result of the tragic derailment at Lac-Mégantic, Québec on July 6th, and a process under Chapter 11 and the CCAA is the best way to ensure fairness of treatment to all in these tragic circumstances,” said Edward Burkhardt, chairman of both the Canada and U.S. branches of the railway. “MMA wishes to continue to work with the Québec Ministry of the Environment, the municipality of Lac-Mégantic, and other government authorities in the continuing environmental remediation and clean-up as long as is necessary, and will do everything within its capacity to achieve completion of such goal.”

The company filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in Maine, and under the Companies’ Creditors Arrangement Act in Montreal, the statement said.

“MMA wishes to thank first responders and other personnel for their tireless efforts under the most difficult of conditions in the wake of the tragic accident,” Burkhardt said. “We also salute the governmental leadership who responded to the tremendous challenges brought by such a catastrophe. Additionally, I want to thank the many MMA people and contractors who have worked tirelessly in the aftermath of this disaster, and who remain on site engaged in clean-up and environmental remediation.”

Burkhardt also reiterated sympathy for the families and community of Lac-Mégantic.

“The people of Lac-Mégantic have suffered a great deal over the last month,” he said. “We are joined in sorrow, a sorrow that will remain a part of me for the rest of my life.”