In a courtroom packed with dozens of lawyers yesterday, the judge presiding over the Montreal, Maine & Atlantic Railway’s bankruptcy proceedings expressed concern that attorneys’ fees will suck the company dry of funds before victims of last month’s deadly train derailment in Quebec can be compensated, the Morning Sentinel reported yesterday. “What’s concerning me is a run-up of administrative expenses that would make operation of the railroad impossible,” said Hon. Louis Kornreich. “There’s not a lot of extra revenue.” If legal fees drain the company of its cash, nothing will be left to compensate victims of the accident on July 6, in which an unmanned train loaded with crude oil rolled downhill into the town of Lac-Megantic, Quebec, derailed and exploded, killing 47 people and destroying 40 buildings in the heart of town. The court-appointed trustee is Robert J. Keach, who also serves as co-chair of ABI’s Commission to Study the Reform of Chapter 11 and is a former ABI president. He has assumed all responsibility for managing the company’s finances, and his firm, Bernstein Shur, will represent the railroad in court. “It’s certainly conceivable that this case is administratively insolvent as we stand here,” Keach said. The bankruptcy case is complex because it spans two countries and is connected to a human tragedy with numerous victims. In addition, it involves a railroad, which by federal law cannot be shut down.
