Canadian Manufacturing

Sale of railway at heart of Lac-Megnatic disaster could be done by December

Documents show eight potential buyers showing interest in insolvent rail firm

MONTREAL—Court-appointed officials say the sale of the insolvent railway involved in last July’s deadly explosion and fire in Lac-Megantic, Que., could be wrapped up in mid-December once a formal process is established to award compensation to victims and other claimants.

Court filings in Quebec say the American trustee is entertaining interest from eight potential buyers for the Montreal, Maine & Atlantic Railway.

The Canadian monitor, Richter Advisory Group Inc., has been in contact with at least two groups in Canada.

The proposed sale schedule, which must be approved by the Quebec and United States bankruptcy courts, would see Oct. 31 as the deadline for expressions of interest from potential bidders.

A lead bidder would be chosen Nov. 15 that would set a floor price for other bidders.

A formal auction of qualified bidders would take place Dec. 13.

Interested buyers would be able to bid on the railway’s total assets or just those in Canada or the U.S.

However, potential buyers must be prepared to continue providing service to customers in Quebec, Maine and Vermont.

The officials said they hoped a formal claims process will be approved by the courts by Nov. 30.

Dozens of people were killed and much of the centre of the picturesque Quebec town of Lac-Megantic was destroyed after an unmanned, runaway train derailed and exploded July 6.

The crude oil that exploded in Lac-Megantic was as volatile as gasoline, but was documented as a less-dangerous product akin to diesel or bunker crude, the Transportation Safety Board has said.

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