Fortress seeks STB approval to acquire, control MMA and Canadian affiliate

Fortress Investment Group L.L.C. has petitioned the Surface Transportation Board (STB) to gain control of the Montreal, Maine and Atlantic Railway Ltd.'s (MMA) new entities after they become approved carriers.

Fortess subsidiary Rail Acquisition Holdings L.L.C. recently landed a deal to acquire MMA and its Canadian affiliate, Montreal Maine & Atlantic Canada Co. (MMA Canada), through a bankruptcy proceeding. When the transaction is finalized by month's end, Fortress plans to rename the railroads the Central Maine & Quebec Railway Inc. (CMQR) and Central Maine & Quebec Railway Canada Inc. (CMQR Canada).

MMA and MMA Canada filed for bankruptcy in August 2013 about a month after the tragic derailment occurred July 6 in Lac-Mégantic, Quebec. Since the bankruptcy proceedings, MMA and MMA Canada have operated under the oversight of a Chapter 11 trustee.

CMQR also has petitioned the STB to acquire and operate U.S. lines totaling about 244 miles that are controlled and operated by MMA. The STB approval would enable CMQR to restore and preserve rail service on lines in Maine and Vermont. Although MMA has continued to provide certain services during the bankruptcy proceedings, east-west through-service between points in Quebec and Maine has not been available to shippers since the derailment, according to a STB filing.

CMQR and CMQR Canada plan to provide service over the entire pre-bankruptcy rail network of MMA and MMA Canada. CMQR Canada expects to file an application with the Canada Transportation Agency seeking authority to acquire and control MMA's Canada's lines.