Bankruptcy Court Approves Assets Sale of Railroad Company Involved in Canada Disaster
By Esther Tanquintic-Misa | January 24, 2014 2:01 PM EST
A bankruptcy court in the U.S. has approved the assets sale of Montreal, Maine and Atlantic Railways (MM&A), seven months after it figured in a fiery railway crash in Lac-Megantic, Quebec that killed 47 people.
Railroad Acquisition Holdings LLC, an affiliate of New York-based Fortress Investment Group, former owner of one of the largest short-line railways in the U.S., has been approved to purchase the insolvent MM&A railway at US$15.85 million for the entire network in both countries.
The Fortress group targets to close its purchase by March 31.
The amount however is still not enough to cover debts to creditors as well as pay the victims of the July 2013 rail disaster.
"It's a fair price for the railroad given the changing landscape following several other railroad oil spills, the prospect of higher insurance premiums and an uncertain regulatory future," the AP quoted U.S. federal bankruptcy trustee Robert Keach as saying.
"We think this is a very good sale for the state of Maine, for the region, for the railroad. Fortress is a proven operator. They have access to capital and I think this will ultimately be a very good thing for the state and for the railroad," he added.
MM&A operates 770 kilometres of track in Maine, Vermont and Quebec.
Fortress operates short-line railways including Florida East Coast Railway. It used to hold a 60 per cent stake in Rail America before it was sold two years ago.
There were more than 40 potential bidders that expressed interest to purchase all or parts of the MM&A. Only 18 however signed confidentiality agreements to gain access to internal financial numbers.
Fortress was the lone bidder for the entire network.
"They certainly have committed both to the court and to us that they intend to operate on both sides of the border and that's a good thing," Mr Keach said.
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Australia's Low Birth Rate May Be Due to Low Confidence in Economy
- Fears Of Infection Spread Prompt Some US Hospitals To Refuse Ebola Patients
- Readers Slam a Book Showing That US Wealth And Power Rests on Slave Labour
- LG G Watch R To Be Available Globally Starting With Europe, North America And Asia Through Retail Sites And Play Store
- Young Teen Fighter Says ISIS Uses Drugs On Suicide Bombers To Get Them Perform The Act
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Shifts Blame On US For Ukraine Crisis, Putin Accuses West of 'Remaking World'