Last summer CTV television interviewed me twice about the Lac-Megantic train derailment disaster, which caused damages estimated in the hundreds of millions of dollars.The Montreal, Maine & Atlantic Railway asked for Chapter 11 bankruptcy protection in the United States. Its Canadian related company applied in Quebec for protection under the Companies’ Creditors Arrangement Act (CCAA).
Under the CCAA, unlike the Bankruptcy Act, the idea is to keep the business going rather than closing it down and selling the assets. If the business is basically sound this could wind up being better for the creditors, because the assets of the business could be worth more if it is still operating than if it is bankrupt.
At least the railroad seems to have cut through years in which it could have denied liability, so that the creditors can get on with their negotiation and collection efforts.
