Update on Settlement Negotiations for Compensation for Lac Megantic Residents: Competing Plan Under Consideration

LAC-MÉGANTIC, QC, April 9, 2015 /CNW/ - A public meeting has been scheduled on Tuesday April 14 at 7:00 p.m. at the OTJ for Lac Mégantic residents and their class action litigation counsel.  Class counsel will provide a detailed review of the ongoing negotiations with the defendants and the MMA bankruptcy Trustees about a proposed settlement of the claim of Lac Mégantic residents. Class Counsel acting for the residents of Lac Mégantic in the Québec class action have been conducting negotiations to establish a settlement fund to fairly compensate residents for losses arising from the July 6, 2013 derailment.  

Class counsel have been actively representing the residents of Lac Mégantic in two parallel proceedings in the Québec Superior Court.  The first is a class proceeding in which an order authorizing the action to proceed on behalf of all residents was requested in hearings in June and August 2014.  That action has been temporarily put on hold by the court pending a possible settlement under negotiation.  The second action is a bankruptcy proceeding in Québec and the U.S. dealing with the bankruptcy of MMA railway.  Negotiations have been ongoing with all defendants and the Trustee in bankruptcy to establish a global settlement fund that fairly distributes settlement payment to residents and all the parties who have claims.

Class counsel have been participating actively in these negotiations to attempt to obtain a fair settlement amount for residents.

MMA has proposed a Plan of Arrangement that would distribute $293 Million (CDN) to the affected parties.  However, Class counsel have a number of reservations in respect of the Plan, and may seek to file an Amended Plan which addresses these concerns and more fairly compensates the residents.

Daniel Larochelle, one of the co-lead Class Action lawyers on the case stated: "the reserves being set aside for individuals suffering from psychological injury are concerning; the fear is that the Plan has underestimated the extent of claims from this extremely vulnerable group".

Co-lead Counsel, Joel Rochon, added that he is concerned that: "the proposed allocation to parents and siblings of wrongful death victims is comparatively low", and that the Plan discriminates against grandparents and grandchildren of wrongful death victims, to the prejudice of other claimants. He also expressed disappointment that "a detailed proposal that we had prepared for an Economic Revitalization Fund intended to assist in restoring the economic viability of the town was not included in the Plan."  He stated:  "We appreciate the work that is being done by the various professionals involved in this matter, but we are disappointed that the Plan has been presented without addressing these very serious outstanding matters.  We will be discussing these shortcomings with our immediate clients and class members, and, if so advised, we will seek to file a modified, more responsive, Plan that has their support"


For further information: Daniel Larochelle (819) 583-5686 Joel Rochon (416) 363-1867 or Jeff Orenstein (514) 266-7863


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