US judge OKs $338 million settlement for victims of oil train disaster that killed 47

PORTLAND, Maine – A U.S. bankruptcy judge on Friday approved a $338 million settlement fund for victims of the fiery 2013 oil train derailment that claimed 47 lives in Quebec, clearing the way for payments to victims by year’s end.

Judge Peter Cary announced his approval after Canadian Pacific dropped its objection and after a Canadian judge gave conditional approval Thursday.

Barring any surprises, payments could be made to victims by the end of November or by year’s end at the latest, said Robert Keach, U.S. bankruptcy trustee. About $83 million, or about $110 million in Canadian dollars, will be used to settle wrongful death claims.

“We don’t pretend to suggest that we made up for everything that happened. But within the limits of the civil system, this is substantial compensation for the victims and they deserve it,” Keach said after the brief hearing.

A runaway train with 72 oil tankers derailed on July 6, 2013, in Lac Megantic, Quebec, setting off powerful explosions and causing raging fires that wiped out much of the downtown.

Robert Bellefleur, a member of a Lac Megantic-based coalition that promotes rail safety, welcomed the judge’s approval.

“It’s good news for people who were hit hard, who lost loved ones, homes, businesses,” said Bellefleur, who knew many of the victims. “It will provide comfort and maybe enable people to get back on their feet and live a more normal life, but without ever forgetting what happened.”

The train’s operator, Maine-based Montreal, Maine & Atlantic, filed for bankruptcy, and the settlement fund is part of those bankruptcy proceedings in the U.S. and Canada.

The fund, worth $446 million in Canadian dollars, came about following negotiations with about two dozen companies with potential liability. In addition to settling wrongful death claims, the money will go to personal injury victims, property damage claimants and government entities.

The judge praised attorneys Friday for working together to get a settlement in place as quickly as possible for a community where the devastation was “vast and complete.”

“My thoughts and good wishes go to the good town of Lac Megantic and the victims’ families,” Cary said.

Canadian Pacific had fought the settlement, saying it shouldn’t be asked to contribute because it bore no responsibility and arguing the settlement would have hampered its ability to defend itself from lawsuits by providing legal immunity only to contributors.

Keach argued Canadian Pacific bears some responsibility for failing to properly classify the volatility of the Bakken region crude oil. The crude was as volatile as gasoline, contributing to the severity of the fire, Keach said.

The amended settlement plan calls for a “judgment reduction provision” that allowed Canadian Pacific to drop its opposition, but Canadian Pacific still isn’t contributing to the settlement.

A Canadian Pacific spokesman said the railroad is pleased that victims will be compensated. The railroad simply wanted to protect its legal interests — not delay payments from responsible parties to those who were harmed, said spokesman Martin Cej.

The settlement isn’t the end of the legal cases related to the disaster.

Wrongful death lawsuits were on hold while the settlement was sorted out. Now Canadian Pacific could be sued in several jurisdictions, and there’s also a separate criminal case pending against several workers who are charged with criminal negligence causing death.

___

Follow David Sharp on Twitter at https://twitter.com/David_Sharp_AP