Proposed settlement of $200 million reached in Quebec rail explosion

An aerial view of burnt train cars after the train derailment and explosion in Lac-Megantic, Quebec July 8, 2013./ Reuters Photo

A proposed partial settlement of nearly $200 million has been reached in the 2013 Lac-Mégantic, Quebec, train derailment and explosion disaster, attorneys said.

The July 6, 2013, accident killed 48 people and destroyed more than 30 buildings after unattended train cars carrying fuel oil derailed and some of the cars exploded, causing Canada's worst railway catastrophe in about 150 years.

Participants in the settlement include the now-bankrupt Montreal Maine & Atlantic Canada Co., the attorneys said Friday in a statement.

“We are pleased to finally reach a partial resolution and settlement for the victims of the train derailment disaster,” said Robert Keach, the appointed trustee for the rail company's bankruptcy case, in the statement. “Due to the diligence and respect by all parties associated with this plan in Canada and the United States, we have put forward a favorable resolution. With continued diligence by all parties, the settlement amount will be significantly higher.”

Mr. Keach is a shareholder with law firm Bernstein, Shur, Sawyer & Nelson P.A. in Portland, Maine.

We have driven the value in the wrongful death estate higher than our clients would have received under Canada,” said Peter Flowers, of Chicago-based Meyers & Flowers Law, who represents victims who died in the disaster and their families, in the statement. “But this is just the beginning of the settlements for our clients.”

He said those involved in the disaster who have not yet settled include Miami-based fuel distributor World Fuel Services Corp., New York-based Canadian Pacific Railway Ltd. and Saint John, New Brunswick-based processor Irving Oil Ltd.

The settlement must still be approved by the Quebec Superior Court and the U.S. Bankruptcy Court.