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updated: 8/8/2013 5:03 PM

Rosemont firm granted protection after Quebec rail tragedy

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Associated Press

MONTREAL -- A Canadian judge on Thursday granted creditor protection to a Rosemont-based rail company whose runaway oil train caused an explosion that killed 47 people in Quebec, a day after the company filed for bankruptcy.

Montreal, Maine & Atlantic Railway Ltd. and its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., have filed for bankruptcy protection in the U.S. and Canada, citing debts to more than 200 creditors following the disaster in Lac-Megantic.

Rosemont-based Rail World owns a controlling interest in Montreal, Maine & Atlantic Ltd.

Quebec Superior Court Justice Martin Castonguay called the railway's actions since the July 6 disaster "lamentable" but did not elaborate.

The company faces lawsuits following the fiery crash and estimates the cleanup costs will surpass $200 million.

Montreal, Maine & Atlantic Canada Co. says in its court documents it has just under $18 million in assets.

Documents filed in U.S. court say Montreal, Maine & Atlantic Railway Ltd. has between $50 million and $100 million in estimated assets and between $1 million and $10 million in estimated liabilities.

A company attorney has said he expects executives to explore putting the rail company up for sale within weeks.

Attorney Peter Flowers, who represents 30 of the victims' families, accused the company's chief of trying to use the legal system to shield his assets from legal responsibility.

The next court hearing is scheduled for Aug. 23.

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