Exploring the
tragic and
complex
nature of
the MMA
cross-border
insolvency
case.
By Jim Middlemiss
20
•
hen a runaway Montreal, Maine
& Atlantic Railway train hauling
72 tankers of Bakken crude oil
derailed and exploded in the
majestic town of Lac Megantic,
Que., killing 47 people and destroying more than 40
buildings on July 6, 2013, it set in motion what is expected to be one of the most compelling and complex
cross-border insolvencies ever tackled by Canadian
and U.S. courts.
"I would say this case has billion-dollar issues, but
only the budget for a few million dollars," says Luc
Despins, a former Quebec lawyer who chairs the
global restructuring practice at Paul Hastings LLP in
New York.
Despins, whose firm is representing the Quebec
government and the largest group of creditors, residents of Lac Megantic, says: "it's a complex case. The
issue is will people be able to get out of the way to allow maximum recovery for the victims?"
MMA is notable because it faces a number of issues
not normally seen in a single cross-border insolvency.
The courts will have to deal with the usual issue of
secured and unsecured creditors fighting over a shortfall of assets, which is common in restructurings.
However, layered into the MMA mix are competing
victim groups — the estates of those who died, and the
property owners and residents who suffered damages
d ec em b er 2013/january2014
INHOUSE
Robert carter
Tracking
the
road
to
ruin
W
