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A Quebec judge has permitted the release of $250,000 in funds of the railroad company involved in the July derailment and explosion in Lac-Megantic, which will permit it to obtain insurance and operate through Oct. 1, a Canadian agency said Friday.
In a statement, the Canadian Transportation Agency in Ottawa said that as a result of a court order by Quebec Superior Court Justice Martin Castonguay, who is overseeing the bankruptcy of the Hermon, Maine-based Montreal, Maine & Atlantic Railway Ltd., it is satisfied that the railroad has “secured the funds for their self-insured obligations.”
On Aug. 13, the agency said it was suspending the required “certificate of fitness” for the railroad and its Canadian subsidiary, effective Aug. 20, because “the railways have not demonstrated that their third-party liability insurance is adequate for ongoing operations.”
Based on the new information, the agency said Friday that it is satisfied the railroad has adequate third-party liability insurance coverage for short-term operations from Aug. 20 to Oct. 1, “conditional on securing their self-insured operations.”
A spokeswoman for the agency said in a statement that without this assurance, the railroad would have had to cease operations as of 5 p.m. Friday.
Dozens died and more than 30 buildings in Lac-Megantic were destroyed after train cars derailed and exploded in Canada's worst railway catastrophe in about 150 years.