Montreal, Maine & Atlantic Rwy Seeks to Dump Rail Tie Yard in Hermon ME

(SOURCE:  BDN Maine, Darren Fishell)

PORTLAND, Maine — The trustee for the bankrupt Montreal, Maine and Atlantic Railway wants to abandon property at Northern Maine Junction in Hermon that contains a pile of railroad ties treated with chemicals state and town officials believe may pose a long-term environmental threat.

The railroad’s trustee, attorney Robert Keach, has filed a motion seeking court approval to abandon the 5.5-acre property that contains piles of railroad ties treated with creosote to preserve the wood.

The most common type of creosote comes from coal tar, which the International Agency for Research on Cancer has found is likely carcinogenic to humans. Rats and mice that ingested small amounts of creosote over a long time developed kidney and liver problems, according to the U.S. Department of Health and Human Services.

The Maine Department of Environmental Protection and town officials in Hermon have expressed concern about the railroad ties.

But Keach wrote that the railroad ties do not pose an imminent threat to human health and that continued ownership by the bankruptcy estate stands to take away from creditors for the railroad.

“The estate lacks sufficient resources to cover the considerable costs associated with maintenance or to address any potential environmental liability,” Keach wrote in a motion to abandon the property. “Further, the Hermon parcel does not produce any value for the state or its creditors. The Hermon parcel, however, poses no imminent threat to the health, safety or welfare of the public.”

Hermon Town Manager Roger Raymond said town officials are concerned about the possibility of springtime grass fires igniting the creosote-treated rail ties adjacent to the tracks, or of creosote leaching into the ground.

“We’re concerned that that area will catch on fire and that some of these ties will burn during the fire,” Raymond said.

Raymond said the town has shared its concerns about piles of railroad ties along tracks that run through the town. Hermon is home to the junction of the north-south line of the former Montreal, Maine and Atlantic Railway and the east-west line of Pan Am Railways.

The issue came up at a Town Council meeting months ago, Raymond said, and town officials have attempted to get in touch with the relevant owners of the railroad tracks and shared their concerns with the Maine DEP.

The railroad’s bankruptcy started after a massive oil train crash in 2013 on its line through Lac-Megantic, Quebec, which resulted in the death of 48 people. Those victims and their families have been offered a settlement to split $85.7 million ($111.2 million Canadian) for damages. Victims and other creditors are set to vote on the settlement package by Sept. 10.

Just more than one year ago, the useful assets of the railroad were sold to the New York-based Fortress Investment Group for $15.85 million, in a deal that excluded the 5.5-acre railroad tie yard.

Keach wrote the land is of no value to other potential buyers and that Fortress refused to take the parcel as part of its purchase agreement.

State environmental regulators this week asked for and received an extension to file a response to the request to abandon the potentially contaminated parcel of land and the related railroad ties stored there, noting it learned of the abandonment plan July 27.

The DEP has an Aug. 13 deadline to evaluate the abandonment request and prepare a response.

MM&A to Become the Central Maine & Quebec Railway

(SOURCE:  By Whit Richardson, BDN Staff)

HERMON, Maine — Once the sale of the bankrupt Montreal, Maine and Atlantic Railway is complete, that name will be filed away in the history books.

Railroad Acquisition Holdings, the affiliate of New York-based investment firm Fortress Investment Group that is in the process of buying Montreal, Maine and Atlantic Railway out of bankruptcy, will change the railroad company’s name to the Central Maine and Quebec Railway.

John Giles, a consultant working with Fortress on the purchase of Montreal, Maine and Atlantic Railway, confirmed the new name in an email to the Bangor Daily News. He said the name was chosen because it “has a nice ring to it” and is an accurate description of the communities it serves.

Chalmers Hardenbergh, an astute railroad industry observer as editor of Atlantic Northeast Rails & Ports, said Fortress chose a descriptive name — something he said would not be as simple as one might think — though one that lacks the expansiveness compared to a name such as Montreal, Maine and Atlantic Railway.

“It’s interesting because a lot of Maine names have already been chosen,” Hardenbergh said. “How do you say Maine when you already have Maine Northern Railway, Eastern Maine Railway, Maine Eastern Railway, Maine Central Railroad, Boston and Maine. So almost by default you have to say central Maine or southern Maine, but of course they don’t operate in southern Maine.”

The new name is similar to that of Maine Central Railroad, which has been around for 100 years and remains the formal name of the railroad operated as part of Pan Am Railways’ network, Hardenbergh said.

“There’s a little bit of an echo there of history,” he said.

Montreal, Maine and Atlantic Railway filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Bangor on Aug. 7, a month after one of its trains rolled driverless down a hill before derailing in the middle of the town of Lac-Megantic, Quebec, and causing an explosion that killed 47 people.

It’s not uncommon for a new owner of a railroad to change the company’s name, especially if it was bought out of bankruptcy, according to Hardenbergh. Before operating as the Montreal, Maine and Atlantic Railway, it was the Bangor and Aroostook Railroad, which filed for bankruptcy in 2002 and was purchased the next year by Rail World Inc.

Fortress, which was the winning bidder in an auction last month for Montreal, Maine and Atlantic Railway’s assets, hopes to close on the sale of the railroad by the end of March.

Bankruptcy Court Confirms Railroad Acquisition Holdings as MM&A Buyer

(SOURCE:  TRAINS Newswire)

BANGOR, Maine – A U.S. Bankruptcy Court in Maine has approved the sale of the Montreal, Maine & Atlantic assets to Railroad Acquisition Holdings for $16.85 million. Railroad Acquisition Holdings is an affiliate of New York-based Fortress Investment Group, owner of the Florida East Coast.

“We think this is a very good sale for the state of Maine, for the region, for the railroad. Fortress is a proven operator. They have access to capital and I think this will ultimately be a very good thing for the state and for the railroad,” Robert Keach, the railroad company’s trustee in its bankruptcy proceedings, tells the Bangor Daily News.

RailWorld holdings and other investors had purchased the property from the bankrupt Iron Road Railways in October 2002 for $50 million. There were no competing bids at that time.

Concurrent with the railroad sale, Great Northern Paper announced that it would halt production at its East Millinocket mill for up to 16 weeks while the company creates a new business plan and retools production, according to the Daily News. Great Northern filed for bankruptcy on the same day the MM&A was created, shutting down for an extended period. At the time it constituted 25 percent of the short line's traffic.

Maine Rail Review Prompted by Quebec Train Explosion Finds Safety ‘Adequate’

(SOURCE - BDN Maine - By Nick Sambides Jr)

AUGUSTA, Maine – A state rail safety review Gov. Paul LePage ordered in response to a Canadian rail disaster that killed 47 people in July found no significant safety flaws in Maine’s 1,150-mile rail system, officials said Wednesday.

“It appears that existing rail safety practices are adequate, and that a tragedy like Lac-Megantic should not occur in Maine if the private railroad operators follow their own safety practices and those of the [Federal Railroad Administration],” the 16-page report states.

LePage ordered the report after a parked and unmanned Montreal, Maine and Atlantic Railway train hauling crude oil from the Midwest lost its brakes and derailed on a sharp curve in Lac-Megantic, Quebec on July 6. The train’s detonation destroyed the center of the town and spurred safety reviews on both sides of the border.

The Maine Department of Transportation’s report is the first to be released. LePage said he was pleased with its findings.

“When that horrible event in Lac-Megantic happened, we increased the focus on the safety of the rail system in Maine,” LePage said in a statement. “But I continue to be optimistic about the steady growth of this industry, which provides good jobs and contributes to the state’s economy.”

MaineDOT, which will closely monitors the investigation into the cause of the Lac-Megantic tragedy being conducted by Transport Canada, will continue to work closely with the Federal Railroad Administration to ensure that there are timely safety inspections of Maine’s rail infrastructure throughout the state, officials said. The FRA is also conducting a review and assisting with the Canadian investigation. 

Federal law governs rail activity. The FRA oversees enforcement of railroad safety regulations regarding tracks, grade crossings, mechanical and rail equipment, operating practices and procedures, and the movement of hazardous materials, officials said. Maine transportation officials assist them with this.

Prior to the Lac-Megantic tragedy, there were 1,021 FRA observations performed in 2013 from January through June on railroads in Maine. Since Lac-Megantic and LePage’s order, FRA and state inspectors made 581 additional inspections of the state’s five privately owned freight rail carriers, including MMA.

Inspectors found defects, but none that warranted rail line shutdowns, officials said. Maine Department of Transportation spokesman Ted Talbot said the defects ranged from excess foliage blocking signage to cracks in rail lines.

He did not have a count of the number or type of defects. That information, he said, is FRA data that his agency is not allowed to release. All concerns and defects observed were sent to the railroads and FRA for correction and follow up, he said.

Ed Burkhardt, president of MMA parent company Rail World Inc., did not immediately return a telephone message Wednesday. MMA President Robert Grindrod was in court in Canada on Tuesday, a representative from his office said.

MM&A Sale Could be Completed in 2013

(via Trains.com Newswire)

BANGOR, Maine – A bankruptcy court sale of the beleaguered Montreal, Maine & Atlantic Railway could be completed in December, The Canadian Press reports. The sale would hinge on the establishment of a process to award compensation to victims of the July 6 derailment in Lac-Mégantic, Quebec that killed 47 people and damaged much of the city's downtown.

Court filings indicate interest from eight potential buyers as of Friday, the report says. Seven had signed non-disclosure agreements to receive confidential data.

Under a proposed sale schedule, expressions of interest would be due to the court on Oct. 31 and a lead bidder would be chosen Nov. 15 to start the process. A formal auction would be held Dec. 13 with court approval in Maine and Quebec on Dec. 16.

Interested buyers would be able to bid on the road's entire assets or just those in the Canada and U.S., but must be prepared to continue rail service.

The railroad's total assets are estimated between $68 and $118 million dollars. The railroad's $25 million insurance policy would also supplement the sale price for the victims' fund.

MM&A Railroad Executive Puzzled by Police Raid

(SOURCE:  By Eric Russell - Maine Press Herald - erussell@pressherald.com )  

Ed Burkhardt, chairman of the board of the Montreal, Maine & Atlantic Railway, says he doesn't know why police raided the company's Quebec offices on Thursday, insisting that the company has been cooperating with police and federal authorites.

"If they asked for what they wanted, we would have given it to them," he said in a telephone interview Friday.

Quebec's provincial police raided a Canadian office of Montreal, Maine & Atlantic Railway in connection with its investigation into the July 6 train derailment that killed nearly 50 people.

There was no indication that the investigation has crossed the border into Maine, where Montreal, Maine & Atlantic is headquartered, or into Illinois, where its parent company, Rail World Inc., is located.

Burkhardt said he is unaware of any law enforcement agencies in the United States that may be involved in the Canadian investigation.

State and federal officials in Maine said they have not been contacted by Canadian authorities in connection with the criminal investigation by Quebec police.

Maine State Police spokesman Stephen McCausland said his agency has not been involved to date.

U.S. Attorney for Maine Thomas E. Delahanty II said his office has not been contacted by Canadian officials.

Provincial police released few details about the raid at the railroad's offices in Farnham, Quebec, about 40 miles east of Montreal, but police Inspector Michael Forget told reporters that officials were there to gather evidence.

"Our investigators were on scene ... to find different evidence that I can't comment on," he said. "This raid was done with the help of different partners. We'll be there until we have gathered all of the evidence that we need."

It's not clear what was seized. Photos taken during the raid show police carrying away unlabeled cardboard boxes.

No arrests have been made, and Forget did not say whether any additional searches would be conducted. He said employees of MM&A were cooperative.

The criminal investigation began shortly after the derailment and is separate from an investigation by the Transportation Safety Board of Canada, which is looking into whether safety procedures were followed.

The Montreal, Maine & Atlantic train hauling 73 cars of crude oil was unmanned when it barreled into the small town of Lac-Megantic at more than 60 miles per hour, decimating several buildings and claiming at least 47 lives.

Cleanup is still going on and likely will continue for weeks. Colette Roy-Laroche, the mayor of Lac-Megantic, said Thursday that the railroad company has not paid the more than $4 million in cleanup costs. Roy-Laroche told Canadian media outlets that the town is considering legal action against Montreal, Maine & Atlantic.

The railroad company is also expected to face numerous lawsuits filed by survivors of those killed by the derailment. The first lawsuit was filed on Monday in Cook County, Ill., where Montreal, Maine & Atlantic's parent company is based.

The complainants have argued that the railway and its CEO, Ed Burkhardt, neglected safety rules in order to cut costs.

Burkhardt has laid blame on train engineer Tom Harding, alleging he "did something wrong" on the night of the crash.

Because the derailment occurred on rail lines owned by the Maine-based company, U.S. Reps. Mike Michaud and Chellie Pingree have called on federal officials to conduct a thorough inspection of the tracks. Federal Railroad Adminstration officials have been in Maine for the past week doing just that.

Pingree is married to S. Donald Sussman, majority share owner of the Portland Press Herald.

Michaud and Pingree have met with both the Federal Railroad Administration and the National Transportation Safety Board, but neither agency has authority to bring criminal charges.

Runaway MM&A Oil Train Explodes Near Maine Border; Quebec Town Center in Ruins

(SOURCE:  BDN-Maine / By Mathieu Belanger, Reuters)

LAC-MEGANTIC, Quebec — A driverless freight train carrying tankers of crude oil derailed at high speed and exploded into a giant fireball in the middle of a small Canadian town early Saturday, destroying dozens of buildings, killing at least three people and leaving an unknown number of people missing.

The disaster occurred shortly after 1 a.m. when the runaway train with 73 cars sped into Lac-Megantic, a picturesque lakeside town of about 6,000 people near the border with Maine, and came off the rails. Witnesses said the town center was crowded at the time.

Four of the pressurized tank cars caught fire and blew up in a fireball that mushroomed many hundreds of feet up into the air. The train was transporting crude oil from North Dakota to eastern Canada, likely to New Brunswick, news that is bound to revive questions about the safest way to carry the oil needed to service North America’s economies…………………………..

An official from Montreal, Maine & Atlantic, the firm that operated the train, said the train had been parked some distance away from the town and no one was on board when it derailed.

“We’re not sure what happened, but the engineer did everything by the book. He had parked the train and was waiting for his relief … somehow, the train got released,” vice president of marketing Joseph R. McGonigle told Reuters………………… READ WHOLE ARTICLE