Victims of Quebec oil-by-rail disaster agree to $200 million settlement

Fri Jan 9, 2015 8:03pm EST
 
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By Julie Gordon

(Reuters) - Victims of the Lac-Megantic oil-by-rail disaster that killed 47 people in the Canadian province of Quebec in 2013 agreed to a nearly $200 million settlement with some of the firms involved, including the insolvent rail operator at the center of the tragedy, a lawyer for the victims said on Friday.

Montreal Maine and Atlantic (MMA), along with its insurers, founder Edward Burkhardt, and various other companies, will pay into the settlement fund, which will be distributed to the victims of the train derailment and explosion, lawyer Peter Flowers of Meyers & Flowers in Chicago told Reuters.

A draft plan of the arrangement was filed in the Quebec Superior Court on Friday as part of MMA's bankruptcy proceedings in Canada and a similar plan will also be filed in a U.S. court. The settlement is subject to approval by the courts.

Once approved, the funds will be split between the wrongful death claimants, including the victims and their families, along with personal injury claimants, property damage and economic claimants, insurers, and provincial and federal governments.

"This is a good first step to bring some form of justice to these people who have gone through hell and back," said Flowers. "Hopefully this helps in some way so these people can figure out the rest of their lives."

Flowers added that the settlement was just the "tip of the iceberg," and said he will continue to pursue claims against other companies linked to the disaster including World Fuel Services (INT.N: Quote), Canadian Pacific Railway (CP.TO: Quote) and privately-held Irving Oil.

The tank cars that derailed and exploded with surprising force in Lac-Megantic in July 2013 were transporting oil from the Bakken energy fields in North Dakota to an Irving refinery in Eastern Canada.

World Fuel Services, which arranged the delivery, has argued in court filings that the rail disaster was chiefly a human error and nothing in the labeling, or packaging could have changed the outcome.

(Reporting by Julie Gordon in Vancouver, David Ljunggren and Randall Palmer in Ottawa, editing by G Crosse and Bernard Orr)

 
An emergency worker stands on the site of the train wreck in Lac Megantic, July 16, 2013. REUTERS/Ryan Remiorz/Pool