Tue 9 Jun 2015 08:11

World Fuel Services announces train crash settlement


Company says it will contribute $110 million to a fund to compensate parties who suffered losses as a result of the 2013 Quebec derailment.



Leading marine, aviation and land fuel specialist, World Fuel Services Corporation, has announced that it has entered into a settlement agreement with the Trustee for the U.S. bankruptcy estate of Montreal, Maine & Atlantic Railway Ltd., Montreal, Maine and Atlantic Canada Co., and the monitor in MMAC's Canadian bankruptcy to resolve claims arising out of the July 2013 train derailment in Lac-Mégantic, Quebec.

Under the terms of the settlement agreement, which is subject to approval by the creditors and courts involved in the U.S. and Canadian bankruptcies, the company says it will contribute US$110 million to a compensation fund established to compensate parties who suffered losses as a result of the derailment.

The company expects that the full settlement amount will be covered by insurance. As part of the settlement, World Fuel Services says it will also assign to the Trustee and MMAC certain claims it has against third parties arising out of the derailment.

In consideration of the settlement amount and the assignment of claims, the company and its affiliates, as well as the company's former joint ventures, DPTS Marketing, LLC and Dakota Petroleum Transport Solutions, LLC and each of their affiliates, will receive the benefit of the global releases and injunctions barring claims against the WFS Parties set forth in the respective bankruptcy plans filed by the Trustee in the U.S. and by MMAC in Canada. The Province of Quebec and other key creditors in the bankruptcies have consented to the settlement.

"We believe that participating in the settlement and contributing to the compensation fund is in the best interests of our shareholders and will also aid in providing closure to those affected by this tragic accident," said Michael J. Kasbar, chairman and chief executive officer. "The entire community of Lac-Mégantic remains in our thoughts and prayers as they continue to recover from this tragedy."

Image: Lac-Mégantic train crash in July 2013.

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