As to the "European Model" remember Europe and Canada has something called Universal Medical Coverage, That Medical Insurance pays for MOST cost of such mass accidents. People can still sue for the costs of the medical treatment, but they have to reimburse back the Government of their prevail (which gives them an incentive NOT to deal with Medical costs).
In my opinion what will happen is the Company will inform the Bankruptcy judge whats its assets are and who they think they are liable to. Such people have to send in a proof of claim to get paid.
I suspect the assets of the Company does not even comes close to paying the cost incurred due to this accident. Thus the Judge has to allocate the assets to the victims as evenly as possible and then tell the victims that is it, and that will be it.
Remember you can not get blood from a turnip, and in this case all the victims can get is the net assets of the company. Now the claims on the company can include punitive damages, but I do NOT see a Bankruptcy Judge permitting those to be recovered UNTIL ALL COMPENSATORY DAMAGES ARE PAID.
On top of this any fines this company now faces are NOT dis-chargeable in Bankruptcy, but if the assets go to other claims (i.e. the victims) any new company will not be liable for those fines (unless assets exceed other liabilities, something I do NOT think is the case here). Also remember any secure creditor retains their claim against any asset they have a secure claim to, up to the value of the asset. Thus if the engines and tank cars are subject to a lien, that lien survives and if the line exceeds the value of the item securing that lien, that item will end up the property of the lien holder. I mention this for many railroads lease their engines and cars and often have mortgage secured by those engines and cars.
Please note if a Creditor has a lien on something, and that lien exceeds the value of the security. The lien must be paid up to the value of the security, but anything over that value becomes an unsecured lien, just like the claims of the victims (i.e. part of the pool of debtors the assets have to be spread over).]
Wages are subject to a priority in bankruptcy. They are behind any secured creditor as to any security, but ahead of any unsecured creditor (including the Victims, and any secured creditor for any amount over and above the value of the security).
Bankruptcy is an old English Common Law practice that started under Elizabeth I. As such most of the above rules applies to any English Common law jurisdiction. Quebec is a Civil Law Jurisdiction, but like Louisiana, it is a Civil Law Jurisdiction in a Country where the Common Law is the rule on the Federal Level. I suspect what will happen is the Canadian court will defer to the American Court except for those assets in Canada. How this will work out, you will need someone familiar with such procedures which I am not.
Remember Bankruptcy is an action in Equity not law and thus everyone has to be willing "to do equity to get equity". Right now that means paying the victims to the full extent of the assets of the company AND keeping the Company running so that can done. The two courts will work together to resolve these two aspects of Bankruptcy and try to treat everyone fairly.
Please note, third parties are NOT restricted by this filing:
Now, if a third party can be brought in to pay these costs, that can be done outside of Bankruptcy by the victims (the Company will have to ask permission of the Bankruptcy judge to do it themselves). The problem is who would be a viable third party? Not the engineer, he does not have enough assets. On the other hand the makers of the Engines and tank cars may be liable for producing an inherently unreliable product. i.e. the hand brakes could NOT hold the cars in place OR they could have a system when the hand brakes could be set all at once, and if these tank cars had such a system it would have prevented this accident.
I bring this up, for with modern electronics it is possible to set up such a system and connect it with electrical cables. How much a court will permit such a claim to go is beyond my knowledge, but it is possible.
Another possibility would be to sue the shipper for NOT making sure the Tank Cars meet the above specs (or something other, even real spec, that these cars and engines do not meet).
= new reply since forum marked as read
For instance, I had not considered the likely secured liens against the engines and cars, a primary asset of the company.
