Judge ap­proves Lac-Mé­gan­tic set­tle­ment fund

Montreal Gazette - - City - GIUSEPPE VALIANTE

The $430-mil­lion set­tle­ment fund pro­posal for vic­tims of the LacMé­gan­tic train dis­as­ter is fair and can pro­ceed de­spite ob­jec­tions by Cana­dian Pa­cific Rail­way Ltd., a Que­bec judge ruled Mon­day.

Su­pe­rior Court Jus­tice Gae­tan Du­mas re­jected two Cana­dian Pa­cific mo­tions aimed at stop­ping the fund, which is ear­marked for more than 4,000 vic­tims and cred­i­tors in con­nec­tion with the de­rail­ment that killed 47 peo­ple in July 2013.

CP said Mon­day it would re­view the de­ci­sion and that it would have no other im­me­di­ate com­ment. While the com­pany can ap­peal the rul­ing, it will re­quire the per­mis­sion of an ap­peals court jus­tice to do so.

Lawyer Jeff Oren­stein, who rep­re­sents the vic­tims of the tragedy, said if CP is not granted the right to ap­peal, he hopes to have the mil­lions dis­trib­uted to vic­tims as soon as pos­si­ble.

“We will push to get the cheques out by the end of the year,” he said. “If it’s pos­si­ble, we’ll do it.”

On July 6, 2013, an un­manned train owned by the Mon­treal Maine and At­lantic Rail­way Ltd. (MMA) roared into Lac-Mé­gan­tic and de­railed, with its cargo ex­plod­ing and dec­i­mat­ing part of the down­town core.

MMA didn’t have enough in­sur­ance to pay dam­ages to vic­tims and cred­i­tors, so it filed for bank­ruptcy in the United States and Canada. The set­tle­ment fund is tied to the bank­ruptcy pro­ceed­ings on both sides of the bor­der.

About 25 com­pa­nies ac­cused of re­spon­si­bil­ity in the 2013 tragedy agreed to pay roughly $431.5 mil­lion to vic­tims.

The terms of the fund of­fer all the com­pa­nies that are giv­ing money a full re­lease from le­gal li­a­bil­ity, in both the United States and Canada, for the dis­as­ter.

The fund was unan­i­mously ac­cepted by vic­tims and cred­i­tors dur­ing a June 8 meet­ing.

While CP has said pre­vi­ously it doesn’t dis­pute that fam­i­lies of the vic­tims de­serve com­pen­sa­tion, it in­sists it was not re­spon­si­ble for what hap­pened.

Its lawyer, Alain Rien­deau, re­minded Du­mas last month that the dis­as­ter “did not in­volve our tracks, did not in­volve our rail cars, our prod­ucts or our em­ploy­ees.”

CP wanted Du­mas to de­clare the on­go­ing bank­ruptcy pro­ceed­ings for the rail­way re­spon­si­ble for the dis­as­ter — Mon­treal Maine and At­lantic Rail­way Ltd. — il­le­git­i­mate.

It ar­gued the case should be heard in Fed­eral Court, not Que­bec Su­pe­rior Court.

CP also wanted Du­mas to rule that the set­tle­ment fund was un­fair be­cause it would have lim­ited its abil­ity to coun­ter­sue the other firms in­volved in the tragedy.

The prob­lem for CP is if any of the 25 com­pa­nies de­cides to sue it to re­coup money put to­ward the fund, be­ing freed from li­a­bil­ity means CP wouldn’t be able to coun­ter­sue.

Du­mas’ rul­ing on Mon­day states CP waited too long to file mo­tions against the court’s ju­ris­dic­tion and the set­tle­ment fund terms.

CP was heav­ily crit­i­cized by lawyers rep­re­sent­ing vic­tims and other com­pa­nies in the fund for wait­ing al­most two years be­fore ob­ject­ing to the court process.

“(CP) can­not come back two years later and com­plain that a judg­ment has no force — es­pe­cially af­ter CP par­tic­i­pated in the court process,” Du­mas wrote.

More­over, Du­mas ruled that his court has ju­ris­dic­tion to over­see MMA’s bank­ruptcy pro­ceed­ings.

On the sec­ond mo­tion, Du­mas said the set­tle­ment fund is fair and “noth­ing pre­vents CP from de­fend­ing it­self from ac­tions taken against it in court.”

“If it is not re­spon­si­ble (for the de­rail­ment), then the ac­tions will be re­jected.”

Oren­stein had won ap­proval for a class ac­tion on be­half of vic­tims of the de­rail­ment and since all other com­pa­nies will be re­leased from li­a­bil­ity, only CP re­mains to be taken to court.

“Ab­so­lutely we in­tend to pro­ceed in our case against (CP),” Oren­stein said.

The ap­proved plan would see just un­der $200 mil­lion go to the gov­ern­ment of Que­bec and the town of Lac-Mé­gan­tic 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.

DARIO AYALA/ MON­TREAL GAZETTE FILES

Smoke and fire rise at night over Lac-Mé­gan­tic af­ter a train car­ry­ing crude oil de­railed and ex­ploded in the town in July 2013.

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