Business Monday

World Fuel faces claims related to deadly train derailment

This photo provided by Surete du Quebec, shows wrecked oil tankers and debris from a runaway train on Monday, July 8, 2013 in Lac-Megantic, Quebec, Canada. A runaway train derailed igniting tanker cars carrying crude oil early Saturday, July 6. At least thirteen people were confirmed dead and nearly 40 others were still missing in a catastrophe that raised questions about the safety of transporting oil by rail instead of pipeline.
This photo provided by Surete du Quebec, shows wrecked oil tankers and debris from a runaway train on Monday, July 8, 2013 in Lac-Megantic, Quebec, Canada. A runaway train derailed igniting tanker cars carrying crude oil early Saturday, July 6. At least thirteen people were confirmed dead and nearly 40 others were still missing in a catastrophe that raised questions about the safety of transporting oil by rail instead of pipeline. AP/SURETE DU QUEBEC, THE CANADIAN PRESS

World Fuel Services Corp. is defending against claims related to a deadly train derailment that spilled oil owned by World Fuel in a small Canadian town. The fiery rail disaster on July 6, 2013, destroyed part of Lac-Mégantic, Quebec, and killed 47 people. Michael Kasbar declined in an interview to comment on the company’s potential liability in the Lac-Mégantic disaster. He said that World Fuel had not retained outside legal counsel to handle claims related to the deadly derailment.

Under a subcontract from Canadian Pacific Railway, the Montreal, Maine and Atlantic Railway, or MMA, was operating a freight train loaded with crude oil from the Bakken region of North Dakota that World Fuel had bought, as part of a crude oil joint venture, and was shipping by rail to a customer in New Brunswick. The train with leased tank cars carrying 50,000 barrels of flammable Bakken crude oil derailed at Lac-Mégantic.

Late last year, World Fuel sold its 50 percent interest in the North Dakota crude oil joint venture to its former partner in the venture, Dakota Plains Holdings Inc. In connection with the sale, World Fuel agreed to indemnify Dakota Plains and certain affiliates for claims of bodily injury or property damage stemming from the derailment at Lac-Mégantic.

Among other signs that World Fuel is prepared to defend itself, The Associated Press reported March 23 that the company had declined to contribute to a proposed settlement fund for victims in the derailment at Lac-Mégantic. Contributors to the fund, which totaled $270 million in late March, hope to gain immunity from lawsuits arising from the derailment.

MIKE SEEMUTH

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