MONTREAL – A U.S. bankruptcy judge has approved plans for creditors in the Lac-Megantic train disaster to begin voting on terms of a $439-million settlement fund.
The fund was approved by a Canadian judge last Monday but also needs approval by a U.S. court for settlement cheques to be distributed to the families of the 47 people killed in July 2013.
Once the creditor voting in the United States has taken place, a judge is expected to consider on Sept. 24 whether to approve the plan.
Montreal Maine and Atlantic Railway Ltd. (MMA) owned the train that derailed but it didn’t have enough insurance to pay damages to victims and creditors, so it filed for bankruptcy in the United States and Canada.
About 25 companies accused in the derailment agreed to pay into a fund to compensate victims, which is tied to the bankruptcy proceedings in both countries.
Robert Keach, the court-appointed monitor for MMA’s bankruptcy proceedings in the United States, says he expects the settlement fund to be accepted south of the border.
“Both courts (U.S. and Canada) need to approve the plans,” Keach said in an interview Friday. “That condition has been satisfied in Canada and the next step is to get the U.S. judge to approve the plan.
“I am pretty confident that the creditors will vote for it and pretty confident it will be confirmed.”
The approved plan would see just under $200 million go to the government of Quebec and the town of Lac-Megantic for cleanup and other related costs.
About $111 million would be distributed to families of the deceased and the remaining millions are reserved for other claims such as psychological and material damages suffered as a result of the train derailment.
As much as $21 million is earmarked for lawyers’ fees.