Montreal, Maine & Atlantic Ltd, the railway involved in last month's deadly derailment and explosion in Lac-Megantic, Quebec, filed for bankruptcy protection on Wednesday, saying the move would enable the company to preserve the value of its assets.
The railway said it lost much of its freight business following the July 6 disaster, which killed 47 people and devastated the town of Lac-Megantic.
The company's chief financial officer, Donald Gardner, said in court documents that monthly revenue had fallen to about $1 million since the derailment.
In light of the dramatic drop in cash flow, the company said it had to seek Chapter 11 bankruptcy to protect the value of its assets for a potential sale, according to court documents filed in U.S. Bankruptcy Court in Maine.
Gardner also said concurrent legal proceedings were filed in Canada to preserve the company as a going concern. The company said it had assets of between $50 million and $100 million and liabilities of up to $10 million.
First published August 7 2013, 1:51 PM