Thursday, April 24, 2014
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In this July 31,2 013 file photo, a crew from Montreal, Maine & Atlantic Railway works to put a derailed locomotive back on the tracks in Brownville. Canadian conglomerate J.D. Irving Ltd.'s NB&M Railways has been in discussions with the state about the process of buying the embattled MM&A Railway.
Tom Bell / Staff Writer
In all, the company estimated that it has more than 200 unsecured creditors, which are businesses or individuals who are owed money but do not have collateral or legal means to force repayment.
Several lawsuits also have been filed since the accident, including a potential class action by victims and by family members of victims from the town.
Because it operates in two countries, the railroad consists of two companies, the Montreal, Maine & Atlantic Canada Co. in Canada and the Montreal, Maine & Atlantic Railway Ltd. in the United States.
The Canadian company also filed for bankruptcy Aug. 7 under Canadian law in Superior Court of Quebec in Montreal.
Because railroads are critical for commerce and have monopoly status, U.S. bankruptcy law has special rules to ensure they continue to operate and are not liquidated. In fact, railroads are not allowed to file for Chapter 7, which is used when a company closes its business and sells off its assets.
If the railroad ceases operations, the federal Surface Transportation Board has the authority to step in and order another railroad to provide service to the defunct railroad's customers.
Another option would be for the bankruptcy court to place the railroad in receivership, which would involve appointing an independent third party to take over operations until the company emerges from bankruptcy or is sold.
Because of its complex nature, it's likely to be months or even years before the bankruptcy case is resolved.
The next step in the Montreal, Maine & Atlantic bankruptcy case is a hearing scheduled for 2 p.m. Thursday at the U.S. Bankruptcy Court, 537 Congress St., Portland.
This story was updated at 12:54 p.m. on Wednesday, Aug. 21 to change the location of the hearing.
J. Craig Anderson can be contacted at 791-6390 or at: