Rail company files for bankruptcy in fallout of Lac-Megantic derailment

The train company at the centre of a tragedy that devastated the town of Lac-Megantic, Que., has declared bankruptcy, according to several reports. The move will cast further doubt on how the cost of cleaning and rebuilding the shattered community will be covered.

Montreal, Maine and Atlantic Railway, a Chicago-based company that operates through the Northeast U.S. as well as Quebec and Atlantic Canada, filed for bankruptcy on Wednesday, according to the Portland Press Herald. The news was confirmed by the Canadian Press and the Associated Press.

The fate of the company had been thrown into doubt after July 6, when a 72-car train carrying crude oil rolled free from a Quebec rail yard and plowed into the town of Lac-Megantic, exploding in a fireball that killed 47 people and demolished a large section of the town.

After promising to cover the cleanup cost, the company stopped paying bills and left it to the local government to pick up the tab.

The company later confessed the possibility that they could be forced out of business, but later said they intended to start running loads through Quebec as early as this week. Their trains would not carry oil, according the chairman Ed Burkardt.

Canada's Transportation Safety Board and Quebec provincial police continue to investigate the derailment. The company has also been named in a few lawsuits stemming from the incident.