PORTLAND, Maine – The sale of a Maine-based railway responsible for a derailment that killed 47 people in Lac Megantic, Que., has been delayed.
Canadian regulators have told a New York investment firm that it must file additional paperwork before finalizing its purchase of the Montreal, Maine and Atlantic Railway, according to the Portland Press Herald.
The newspaper said scheduled sale date of March 31 could be pushed back several months.
The investment group, Railroad Acquisition Holdings, an affiliate of New York-based Fortress Investment Group, said it was prepared for the delay.
The MM&A filed for bankruptcy after an unattended train with 72 oil tankers rolled into the town, derailed and exploded, destroying 40 buildings, including a busy bar where many of the victims perished.
The Canadian Transportation Agency and Transport Canada have yet to approve the transaction, according to Robert Keach, who has overseen MM&A’s operations during its Chapter 11 bankruptcy proceeding.
The delay could be for as long as two months, but that depends on the speed of the regulatory process in Canada, he said.
“The delay is considered routine and, in fact, the contingency for such a delay was built into the asset purchase agreement,” Keach wrote in an email.
Jacqueline Bannister, a spokeswoman for the Canadian Transportation Agency, told the newspaper that Canadian regulators are not to blame for the delay.
As of Wednesday, the agency had not received an application from CMQR for a certificate of fitness, which is required in Canada to operate a railway, Bannister said in an email.
“If and when CMQR submits an application for a certificate of fitness to operate a railway under federal jurisdiction, the agency will review the submission and issue a decision, as it does for all such applications,” she said.
Keach said CMQR had advocated for the March 31 deadline because MM&A’s insurance was scheduled to expire that day and there were concerns it would run out of working capital to keep running.
However, those Keach said those concerns have been addressed.
“All relevant insurance has been extended to June 1 and the current financing is sufficient to cover the anticipated delay. I do not expect any impact on operations from the delay and we expect prompt action by the regulatory authorities,” Keach wrote.
— With files from The Canadian Press