BUSINESS

Lac-Mégantic Disaster's MM&A Railway Up For Auction Today

01/21/2014 09:31 EST | Updated 03/23/2014 05:59 EDT
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Investigators work at the train derailment site July 9, 2013 in Lac-megantic, Quebec, Canada. The death toll from the massive explosion caused by a runaway oil tanker train that derailed July 6 and flattened part of the small Canadian town has risen to 13, a coroner said Monday, and dozens more remain missing. Confirmation of eight further deaths in Lac-Megantic, in Quebec province, came as environmental officials warned that around 100,000 liters of oil spilled in the disaster was headed for the Saint Lawrence seaway. PHOTO STEEVE DUGUAY-AFP (Photo credit should read STEEVE DUGUAY/AFP/Getty Images)
The railway company at the centre of the fatal derailment in Lac-Megantic, Que. is up for auction today.

The sale of Montreal, Maine and Atlantic Railway (MM&A) begins at 10 a.m. in Portland, ME.

The railway company filed for bankruptcy protection after 72 oil tankers rolled out of control into the centre of Lac-Mégantic and derailed, setting off an explosion that killed 47 people and destroyed the town's centre. 

The sale initially attracted interest from about 20 potential buyers, who will bid on the sale of the company's buildings, property and about 770 kilometres of track in Maine, Vermont and Canada. It's not known how many bids will be made Tuesday in the closed-door auction.

Proceeds from the sale will be used to repay creditors and victims, supplementing $25 million in insurance payouts for wrongful death, personal injury, property damage, fire suppression and environmental impact.

The town of Lac-Mégantic and the Quebec government were forced to front the cash for the town's cleanup, but the sale isn't likely to come close to covering that expense. 

The cost of the cleanup is expected to exceed $200 million, more than 12 times the initial bid of $15.7 million, set by
Railroad Acquisition Holdings LLC.

Any winning bid would still have to be approved in a separate hearing scheduled for Thursday.

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