MM&A seeks creditor help for legal fees
The Montreal, Maine and Atlantic Railway has filed a motion to subtract $5 million from what it owes the Federal Railroad Administration in order to help pay legal fees for its bankruptcy proceedings.
The Portland Press Herald reported the railroad filed a motion in U.S. Bankruptcy Court Monday, seeking approval to use $5 million of the anticipated proceeds from selling the railroad’s assets for the company’s Chapter 11 bankruptcy case.
The FRA is the company’s largest secured creditor and is owed $28 million of the railroad’s assets. The motion, which has been approved by federal officials, asks for $5 million of that amount to be set aside for legal fees. The motion now awaits court approval.
Judges in the case have previously expressed concern that the railroad, which will generate between $50 million and $100 million in a sale, will not be able to both pay its legal fees and fulfill damage claims from victims of a July 6 derailment that killed 47 people in Lac-Megantic, Quebec. In total, the company owes about $39 million to it largest creditors, has over 200 unsecured creditors and faces 19 pending civil lawsuits from people connected to the crash.
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