Financial noose tightens around firms at centre of rail disaster

The financial noose tightened Monday around companies connected to the deadly Quebec derailment, with a hint that the Montreal, Maine & Atlantic Railway could close shop.

The financial noose tightened Monday around companies connected to the deadly Quebec derailment, with a hint that the Montreal, Maine & Atlantic Railway could close shop.

The Quebec government issued a lawyer’s letter demanding that the railway involved in the Lac-Megantic crash and two petroleum-logistics companies foot the entire bill to clean up the environmental mess, the latest in a series of legal threats since the disaster.

This was after the railway chairman had already told a Maine newspaper that he was considering whether the embattled MMA could survive.

The July 6 disaster, which killed an estimated 47 people, also released 5.7 million litres of crude oil into the air, soil and water, including about 100,000 litres that gushed into the nearby Chaudiere River.

“It’s perhaps the worst environmental catastrophe that Quebec has seen,” Environment Minister Yves-Francois Blanchet told a news conference in Lac-Megantic.

“There are still no words to describe what we feel, what we have experienced here.”

The companies named in the lawyer’s letter are Montreal, Maine & Atlantic Railway, and World Fuel Services Corp. and its subsidiary, Western Petroleum Company.

For all three, the legal troubles tied to the disaster are piling up.

Each of the firms are already facing several wrongful-death lawsuits in the U.S., with both the embattled MMA and World Fuel Services also named in a proposed class-action suit.

The U.S. lawyer who filed the wrongful-death suits has said he expects to ask for millions of dollars in damages for each of his clients. The total number of plaintiffs, he predicted, could eventually reach 20.

Last week, the town of Lac-Megantic sent MMA a legal notice calling on it to reimburse the municipality $4 million after the company allegedly failed in its duty to pay cleanup workers.

The municipality and the province picked up the tab when crews hired by the railway threatened to walk off the job if they weren’t paid.

They are now seeking a refund from the railway.

The Maine-based railway missed last week’s deadline, and the town has said it’s now speaking with lawyers to evaluate a possible lawsuit.

The railway, meanwhile, asked the town to wait until Tuesday for its response to the legal notice.

MMA board member Yves Bourdon has said the municipality shouldn’t have been stuck with the bill. When asked recently whether it was normal that Lac-Megantic should have to pay, he replied: “It should be our insurance.”

Blanchet insisted Monday “it is out of the question” that Quebec taxpayers should be on the hook for the massive environmental mop-up and rehabilitation.

The work still doesn’t have an estimated overall price tag.

The environment minister said the province would have several possible legal options if the companies refuse to pay up, but he declined to discuss them.

Blanchet also indicated that he wouldn’t analyze the financial capacities of the companies, a job he said he would leave for the Justice Department.

The question, however, of how much the companies can afford to pay has led to concerns in Lac-Megantic.

Even MMA chairman Ed Burkhardt expressed doubt about the future of the company, according to recent comments he made to the Maine Sunday Telegram.

The newspaper reported Sunday that when asked whether the railway could survive, Burkhardt replied, “That’s part of what we are considering right now. I am not prepared to comment.

“Decisions haven’t been made yet.”

Burkhardt then added, in the interview last Friday, “I can say this: It’s a real hill to climb.”

An official at MMA’s Maine office said Monday that company president Robert Grindrod would not be available for comment and referred all inquiries to Burkhardt, who also heads MMA’s major stockholder, the Illinois-based Rail World Inc. Burkhardt did not return a message left at his office Monday.

An employee at Western Petroleum Company said all media questions on the subject were being directed to World Fuel Services, which is headquartered in Miami.

“We are getting a translation of the order, so that we can review it,” said World Fuel Services spokeswoman Carmen Garcia, who declined to discuss its other legal troubles linked to the Lac-Megantic derailment.

“At this point, we’re not issuing any other further comments on any other legal proceedings.”

The devastating derailment prompted Ottawa to revamp some rules on train transport, following the advice of the federal Transportation Safety Board.

Railroad safety remains a major concern, particularly among mayors of other Quebec towns along the MMA line.

The Federation of Canadian Municipalities held a first conference call Monday for its recently created rail-safety working group.

“We want to be able to work closely with the federal government,” Pauline Quinlan, mayor of the Quebec town of Bromont, said in an interview after the call.

“Our preoccupation is to make sure that the infrastructure is kept in good shape and that what is being transported is also transported in a safe way.”

During a recent meeting with federal Transport Minister Lisa Raitt, some Quebec mayors expressed concern about the integrity of rail infrastructure.

Quebec and the federal government have each promised $60 million for emergency assistance and longer-term reconstruction help for the town.

As for the environmental cleanup, Blanchet said he wanted to eliminate any doubts the work would continue without interruption.

“I can assure you that, starting now, there will be no more work stoppages.”

– With a file from Jim Bronskill

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Asymptomatic testing will now be available for "priority groups" who are most likely to spread the COVID-19 virus to vulnerable or at-risk populations. File photo by THE CANADIAN PRESS
Marcus Golczyk, with Taco Monster, hands food to a customer during Food Truck Drive and Dash in the Westerner Park parking lot in Red Deer Friday afternoon. The drive-thru event will run every Thursday from 4-7 p.m. and Friday from 11 a.m. to 2 p.m. through June. Photo by SEAN MCINTOSH/Advocate staff
Food Truck Fridays, Food Truck Drive and Dash return in Red Deer

Red Deerians are able to take in a drive-thru food truck experience… Continue reading

Don and Gloria Moore, of Red Deer, are set to celebrate their 70th anniversary later this month. (Contributed photo)
Red Deer couple to celebrate 70th anniversary

Red Deer couple Don and Gloria Moore are set to celebrate their… Continue reading

Chris Scott, owner of The Whistle Stop Cafe, was put in handcuffs after an anti-restriction protest Saturday in the parking lot of the business. (Screenshot via The Whistle Stop Facebook page)
UPDATE: Central Alberta cafe owner arrested after anti-restriction protest

The owner of a central Alberta cafe, which was the site of… Continue reading

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
Red Deer now has 911 active COVID-19 cases

Central zone has 2,917 active cases

FILE - A firefighter wears a mask as he drives his truck. THE CANADIAN PRESS/Jonathan Hayward, File
VIDEO: Flames rip through Edmonton-area seniors complex, but no fatalities

ST. ALBERT, Alta. — Fire has destroyed part of a retirement complex… Continue reading

Quebec Premier Francois Legault chairs a premiers virtual news conference as premiers John Horgan, B.C., Jason Kenney, Alberta, and Scott Moe, Saskatchewan, are seen onscreen, Thursday, March 4, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Several provinces bring in new restrictions as high COVID-19 case numbers persist

Several provinces are gearing up to tighten public health measures once again… Continue reading

Members of the RCAF take part in a Royal Canadian Air Force change of command ceremony in Ottawa on Friday, May 4, 2018. The Royal Canadian Air Force is hoping Canada will open its doors to military pilots from other countries as it seeks to address a longstanding shortage of experienced aviators. THE CANADIAN PRESS/ Patrick Doyle
RCAF turns to foreign pilots to help with shortage as commercial aviators stay away

OTTAWA — The Royal Canadian Air Force is hoping Canada will open… Continue reading

An arrivals and departures information screen is seen at the Halifax Stanfield International Airport in Halifax on Thursday, Jan. 4, 2018. The chief executive of Atlantic Canada's largest airport is hoping for COVID-19 testing for arriving passengers "sooner rather than later," as an added measure to combat the province's third wave of the virus. THE CANADIAN PRESS/Andrew Vaughan
Halifax airport CEO hopes for more on-site COVID testing ‘sooner rather than later’

HALIFAX — The chief executive of Atlantic Canada’s largest airport is hoping… Continue reading

Shoppers wear mask as they shop at a nursery & garden shop on Mother's Day weekend during COVID-19 pandemic in Wilmette, Ill., Saturday, May 8, 2021. (AP Photo/Nam Y. Huh)
Tearful reunions mark second Mother’s Day under pandemic

Last Mother’s Day, they celebrated with bacon and eggs over FaceTime. This… Continue reading

Arizona Coyotes head coach Rick Tocchet, standing, watches the game during the second period of an NHL hockey game Wednesday, April 14, 2021, in St. Paul, Minn. The Wild won 5-2. (AP Photo/Craig Lassig)
Tocchet won’t return as coach of Coyotes after 4 seasons

GLENDALE, Ariz. — The Arizona Coyotes and coach Rick Tocchet have mutually… Continue reading

Columbus Blue Jackets head coach John Tortorella shouts at an official after a fight between Columbus Blue Jackets' s Gavin Bayreuther and Florida Panthers' Sam Bennett during the second period of an NHL hockey game, Monday, April 19, 2021, in Sunrise, Fla. (AP Photo/Lynne Sladky)
Tortorella out after 6 years as Columbus Blue Jackets coach

COLUMBUS, Ohio — John Tortorella is out as coach of the Columbus… Continue reading

A caribou grazes on Baffin Island in a 2008 file photo. A last-ditch attempt to save some of Canada's vanishing caribou herds is a step closer after a scientific review panel's approval of a plan to permanently pen some animals and breed them to repopulate other herds. THE CANADIAN PRESS/AP-Kike Calvo via AP Images
Parks Canada captive caribou breeding proposal gets OK from scientific review panel

JASPER, Alta. — A last-ditch attempt to save some of Canada’s vanishing… Continue reading

The smouldering remains of houses in Slave Lake, Alta., are seen in a May 16, 2011, file photo. The wildfire that is devastating large swaths of the northern Alberta city of Fort McMurray comes just five years after another blaze destroyed 400 buildings and left 2,000 people homeless in Slave Lake, Alberta. THE CANADIAN PRESS/Ian Jackson
Ten years later: Five things to know about the Slave Lake wildfire

A wildfire burned about one-third of Slave Lake in northern Alberta in… Continue reading

Most Read