Victims of Lac-Megantic disaster close to receiving part of $450-million fund

Lawyers for victims of the Lac-Megantic train disaster are recommending their clients accept a motion that would allow Canadian Pacific Railway to stop blocking hundreds of millions of dollars in settlement money, an attorney said Thursday.

MONTREAL — Lawyers for victims of the Lac-Megantic train disaster are recommending their clients accept a motion that would allow Canadian Pacific Railway to stop blocking hundreds of millions of dollars in settlement money, an attorney said Thursday.

Jeff Orenstein, whose Consumer Law Group represents the victims of the derailment, said attorneys from all sides have agreed to recommend giving Canadian Pacific (TSX:CP) legal assurances in exchange for it dropping its appeal against the $450-million fund.

He said his clients and the Quebec government — also plaintiffs in the case — still need to be consulted and haven’t yet given the green light to the motion that was recently tabled by lawyers for Montreal Maine and Atlantic Railroad (MMA), the now-defunct firm at the centre of the disaster that killed 47 people on July 6, 2013.

Orenstein said he and the attorneys for the Quebec government “would support the motion. But neither of us felt comfortable saying we agree without both of our clients saying officially they also agreed.”

He said Quebec Superior Court Justice Gaetan Dumas has given them until Tuesday evening to confirm, in writing, that the motion is officially accepted by all sides.

If that happens, CP has said it will drop its appeal and the settlement money could begin to be distributed to victims by the end of the year.

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 in both countries.

CP has been the only company accused in the derailment to not participate in the settlement fund and over the summer sought leave to appeal the fund.

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

CP objected to the motion for several reasons, notably because the company thought it wouldn’t be able to defend itself if it was taken to court by any of the firms released from legal liability.

MMA’s motion offers CP legal assurances that if it is taken to court and loses, it can’t be asked to pay for the same damages already paid out by other firms, Orenstein said.

Patrice Benoit, lawyer for MMA, said Thursday that CP can still be held liable for the derailment.

“There is absolutely no concession that has been granted to Canadian Pacific,” he said outside the courtroom in Granby, Que., 80 kilometres east of Montreal.

“What Canadian Pacific has offered — and what we have accepted subject to us agreeing on the language — is to withdraw all its appeals in Canada and the United States.”

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