Transparency Sought in Train Derailment Settlement

Some of the world’s biggest oil companies are chipping in to repay victims of a deadly train derailment, but unless a bankruptcy judge says otherwise, the amounts they’re paying will remain secret.

As Daily Bankruptcy Review and The Wall Street Journal have reported, insurers, oil companies and others will together pony up several hundred million dollars to compensate those affected by the 2013 derailment of a crude oil-carrying train in Canada. After the crash, the train operator filed for bankruptcy and began pursuing litigation in an effort to compensate those who were injured, lost their lives or had their businesses damaged when the runaway train crashed into a small Quebec town and exploded.

The terms of the settlement aim to shield the specific dollar amount that companies like Royal Dutch Shell PLC , Marathon Oil Corp., ConocoPhillips ,and Irving Oil Ltd. would each pitch in to what has grown to become a $345 million fund. According to the official who brokered the deals, making this information public would hurt the companies should the settlement fall through and they become exposed again to potential lawsuits over their alleged roles in the deadly crash.

But the federal government isn’t buying that. On Thursday, a Justice Department watchdog urged a Maine bankruptcy judge to expose the dollar amounts, arguing that efforts to keep them secret “violate the strong public policy in favor of public access to documents filed with the bankruptcy court.” The watchdog said other courts have rejected the argument that making the figures public will hurt the companies’ chances in future litigation.

Among those whose contribution is already public is World Fuel Services Corp., which recently agreed to contribute $110 million to the fund in order to be freed from litigation accusing it of falsely identifying the train’s cargo of crude oil as low danger when in fact it was highly voluble.

The bankruptcy judge will consider making other companies’ contributions public at a June 23 hearing.

Write to Jacqueline Palank at [email protected]. Follow her on Twitter at @PalankJ