Judges approve sale of MM&A to Fortress Investment Group
Staff Report
BANGOR — Judges at U.S. Bankruptcy Court in Bangor and Superior Court in Montreal, Quebec gave the green light for the sale of Montreal, Maine at Atlantic Railways to a New York investment group last week.
Simultaneous hearings were held in Canada and Bangor on June 23 with Judge Louis Kornreich presiding in the Bangor court.
Fortress Investment Group (FIG) hopes to close on its purchase of the bankrupt railway by March 31, Chapter 11 trustee Bob Keach told the Associated Press. The railroad has about 500 miles of track in Maine, Canada and Vermont. It has a repair shop in the Derby section of Milo, and is the town’s largest taxpayer.
A Fortress subsidiary bid $14.25 million for the railroad, but the value increased to $15.85 million when Fortress forfeited $1.6 million worth of locomotives that will be sold separately.
The sale price is way below the railroad’s actual value, Keach said, but due to the lawsuits facing the railroad from the tragedy at Lac Megantic last year, increasing insurance premiums and other factors, he described the sale as “a very good deal.”
The railroad filed bankruptcy after an unmanned train with 72 tanker cars derailed in Lac Megantic, Quebec last summer. The explosion caused 47 deaths and millions of dollars in property damage.
According to Fortress Investment Group’s website, the company manages approximately $58 billion in private equity, hedge funds and credit, and has extensive experience in the rail industry.
They acquired Rail America Inc. in 2006 and later sold it to Genesee & Wyoming Industries in 2012.
Their portfolio also includes Florida East Coast Railway, which operates between Jacksonville and Miami; and is involved in the development of passenger train service connecting Miami, Fort Lauderdale, West Palm Beach and Orlando.
In September 2013, FIG bought eight daily and 15 weekly newspapers — including the York County Coast Star and York Weekly in southern Maine — from the Dow Jones Local Media Group. The publications are now managed by GateHouse Media based in Fairport, N.Y.