Bankruptcy panel sought for Quebec train disaster victims

Thu Sep 12, 2013 1:25pm EDT
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By Tom Hals

(Reuters) - A judge should appoint a broad committee of victims of a deadly train explosion in Quebec to resolve a split among claimants in the railway operator's U.S. Chapter 11 bankruptcy, according to a U.S. bankruptcy watchdog.

A flurry of lawsuits have been filed in the wake of the devastating blast in Lac-Megantic and victims have clashed over the best way to press their claims against Montreal, Maine & Atlantic Railway Ltd.

An MMA train loaded with crude oil derailed and exploded in the town on July 6, killing 47 and causing widespread property and environmental damage.

A month later, the company filed for bankruptcy in Bangor, Maine.

The U.S. Trustee, a Department of Justice official who oversees bankruptcy cases, asked the bankruptcy court to appoint a broad committee covering property owners, government entities and those killed or hurt.

"No victim should be excluded from representation," he said in papers filed by William Harrington, the U.S. Trustee in Portland, Maine.

A hearing on the dispute is scheduled in Bangor on Friday at 10 a.m. EDT in front of Judge Louis Kornreich.

U.S. bankruptcies allow creditors to form court-recognized committees that negotiate a settlement of claims. The bankrupt company provides a budget and the committee can hire legal and financial advisers.   Continued...