$77M settlement proposed for Lac-Megantic victims' families

A woman walks in front of Ste-Agnes church in Lac-Megantic, Que., on Friday, July 4, 2014. (Paul Chiasson / THE CANADIAN PRESS)

MONTREAL -- Relatives of people who died as a result of the Lac-Megantic train derailment could receive their share of a $77-million wrongful-death settlement as early as August, says one lawyer.

Creditors and the courts still need to approve the plan before money is disbursed, U.S. attorney Robert Keach said Thursday.

"The hope and the goal is that we would see money in the hands of claimants in August of this year or the latest in early September," said Keach, the court-appointed trustee in the bankruptcy filing of the rail company at the centre of the derailment.

An oil-laden train owned and operated by Montreal Maine and Atlantic Railway derailed and exploded in Lac-Megantic on July 6, 2013, killing 47 people and destroying much of the downtown.

A firefighter who helped pull bodies from the rubble later committed suicide and has been counted among the 48 people whose families will split the $77 million.

The settlement is part of a larger sum of $300 million cobbled together from companies, including Montreal Maine and Atlantic Railway, involved in the derailment.

The lawsuit was filed in Illinois because many of the firms are American and also due to the fact the state has no limits on payouts to victims.

Nearly two dozen companies including oil-exploration firms, tank-car owners, Irving Oil and Montreal Maine and Atlantic Railway agreed to pay the families of victims as well as creditors such as the Quebec and Canadian governments, Lac-Megantic property owners and other people who suffered trauma.

Also listed as a contributor to the $77.2 million is Edward Burkhardt, president and CEO of Rail World Inc., which owned Montreal Maine and Atlantic Railway before its assets were sold.

Keach said Burkhardt has agreed to personally pay money to victims, but confidentiality agreements prohibit the sum being made public.

Notably absent from the list of companies that have agreed to pay claimants are Canadian Pacific Railway (TSX:CP) and World Fuel Services Corp.

Peter Flowers, the U.S. attorney representing families in the wrongful-death suit, said Thursday he intends to file lawsuits against CP and World Fuel next week.

"We intend to go full speed ahead to make sure that these other two companies are held responsible," he said in an interview.

"And the only thing that they listen to is a court system that holds them responsible."

Calls to CP and World Fuel Services were not returned Thursday.

Keach said he also is suing CP and World Fuel to recoup money for creditors and victims of the tragedy. He said if he cannot reach a settlement with the companies he'll take them to trial and "ultimately they are going to lose."

He said his lawsuit focuses on the classification of the oil that was being transported the night of the tragedy.

"We firmly believe that if this oil had been properly classified this accident could have been avoided," he said. "The issue of classification and who knew what and at what time is important."

Flowers said his goal is go get as much money as possible from CP and World Fuel.

"No money is enough money," he said. "Would you ever trade any amount of money for the death of your family member? -- I wouldn't."

A spokeswoman for Lac-Megantic said the town's lawyers are reviewing the settlement proposal and will wait until next week to comment.

There is a separate, criminal case ongoing related to the train disaster.

Train driver Tom Harding and two other railway employees are each facing 47 counts of criminal negligence causing death -- one for each victim.

The case has not yet gone to trial.

A conviction carries a maximum life sentence.