Chicago law firm hopes to help resolve MM&A Railway bankruptcy | Canadian Insurance

Chicago law firm hopes to help resolve MM&A Railway bankruptcy

US Senator George Mitchell appointed to help break bankruptcy logjam

Chicago law firm, Meyers & Flowers, announced that the Unofficial Committee of Wrongful Death Claimants in the Montreal, Maine & Atlantic Railway (MMA) Chapter 11 bankruptcy case filed a plan today. A key element of the plan is the appointment of former U.S. Senator George J. Mitchell as the Plan Fiduciary.

MMA filed for bankruptcy after one of its trains derailed and exploded in Lac-Megantic, Que. on July 6, 2013.

The bankruptcy court has approved the sale of the railroad, with the closing expected in March. The trains will keep running, but no money is being set aside for the victims, according to a Meyers & Flowers press release. Insurance coverage of at least $25 million is available, and negotiations are continuing with the insurance company and other stakeholders. It is hoped that with Senator Mitchell’s leadership, a consensual negotiation of all outstanding issues can be achieved to allow for a prompt distribution to those affected by this accident.

Read: Judges in Quebec and US approve $16.85M sale of insolvent MM&A

Senator Mitchell is renowned for his leadership in bringing opposing parties together in agreement. He helped broker a peace agreement in Northern Ireland, which earned him the Presidential Medal of Freedom. He was also instrumental in Middle East peace negotiations and in leading the investigation of Major League Baseball regarding performance-enhancing drugs.

“Knowing of Senator Mitchell’s record in this regard, we think he can help break the bankruptcy logjam,” said Peter Flowers, whose Chicago law firm, along with attorneys Jason Webster and Mitchell A. Toups, represents the Unofficial Committee.

The proposed plan provides for the insurer to settle, or else to turn over a portion of the policy proceeds to the MMA’s bankruptcy estate. The plan includes a split of insurance proceeds whereby 75% would be distributed to claims for wrongful death and personal injury claims, which would be paid through the chapter 11 case, and 25% would be distributed to property damage claimants through the Canadian insolvency proceeding of MMA’s Canadian subsidiary.

Read: The latest railway risk news 

“The idea is to get this done quickly by dividing responsibility between the U.S. and Canadian cases rather than have a tug of war. We hope Senator Mitchell can help rally support for a compromise,” Flowers explained in a press release.

Follow us on Twitter at @CITopBroker for the latest on this story