All but 800 of the evacuated residents were allowed to return to their homes in the afternoon of the third day: all but 200 were able to return by the sixth day. At least twenty had no home to which to return. Some homes had reportedly been broken into during their vacancies, although police deny that homes were looted. Rail World’s president and CEO Edward Burkhardt visited the town on July 10, 2013, and was heckled by residents.
After the accident, the railway’s safety record was called into question: over the previous decade the firm recorded a higher accident rate than the rest of the U.S. rail fleet, according to data from the Federal Railroad Administration.
In the previous year, the railroad had 36.1 accidents per million miles travelled, in comparison to a national average of 14.6 accidents. Burkhardt’s historical involvement with a 1996 derailment on the Wisconsin Central in which hazardous materials burned for over two weeks also drew renewed scrutiny.
While the actual cause of the disaster was still under provincial (Sûreté du Québec) and federal (Transportation Safety Board) investigation, Burkhardt announced the railway had suspended the engineer for allegedly improperly setting the handbrakes on the rail cars. The engineer was made unavailable at the suggestion of his lawyer and MMA instructed its employees not to answer questions from police without first consulting the company’s lawyers. A former colleague established an Albany-based legal defense fund for the engineer.
The Sûreté du Québec raided MMA offices in Farnham on July 25 as part of a criminal investigation into the Lac-Mégantic fatalities; the Transportation Safety Board conducted its own search backed by the RCMP (the federal police in Canada) on August 1. Raymond Lafontaine, a local contractor who lost a son, two daughters-in-law and an employee, raised concerns about the poor condition of MMA-owned track and about the increasing quantity of dangerous goods being transported through downtown areas by rail, not only in Lac-Mégantic but in cities such as Sherbrooke.
He asked that the tracks be repaired and rerouted to bypass the town’s core. Lac-Mégantic mayor Colette Roy-Laroche sought assistance from federal and provincial governments to move the trains away from the downtown, a proposal opposed by the railway due to cost, and asked tourists not to abandon the region. MMA announced that it intended to make future crew changes in Sherbrooke so that trains would no longer be left unattended; that city’s mayor, Bernard Sévigny, expressed concern that this would merely shift the hazard into the center of Quebec’s sixth-largest city.
The two major Class I Canadian railways, Canadian Pacific Railway and Canadian National Railway, indicated that they would not be leaving unattended locomotives unlocked outside a terminal or yard, and that CPR tank car trains containing regulated commodities would no longer be left unattended on a main line, in response to this incident.
On August 6, 2013, Burkhardt stated that MMA has no further plans to carry oil by rail. On August 7, 2013, the company filed for bankruptcy protection in both the Quebec Superior Court in Montreal (under the Company’s Creditors Arrangement Act) and the United States Bankruptcy Court in Bangor, Maine, (under Chapter 11).
On August 13, 2013, the Canadian Transportation Agency suspended the railway’s Certificate of Fitness effective August 20 because of its failure to obtain adequate insurance coverage, shutting down the line. It later extended this deadline to conditionally allow operation until October 18.
While the amount of liability insurance is not listed on the federal Certificate of Fitness for reasons unknown, MMA’s bankruptcy petition disclosed an insurance policy valued at $25 million and an estimated cleanup cost, which excludes damages in tort, of $200 million. MMA’s Certificate of Fitness was last modified in 2005, to reflect the use of the line by Orford Express (an independently owned passenger service between Magog and Sherbrooke).
It is unclear whether notice was given of the oil-by-rail shipments which began in 2012 despite a requirement to “notify the Agency in writing without delay if the operation has changed so that the liability insurance coverage may no longer be adequate.” In Maine, state transportation authorities have contacted all rival freight operators in-state to establish a contingency plan.
if MMA ceases operation, U.S. federal law requires a trustee keep the line operating until a buyer is found because of the MMA’s status as a monopoly in many communities. The U.S. has no requirement that privately owned railways carry liability insurance.