By Associated Press - Friday, January 17, 2014

PORTLAND, Maine (AP) - The Maine-based railroad that filed for bankruptcy after one of its trains killed 47 people in Canada will go up for auction next week if bidders who met a bankruptcy court’s Friday deadline are deemed to be qualified.

Two or more bids above and beyond the starting bid were expected for Montreal, Maine and Atlantic Railways.

Chapter 11 trustee Robert Keach said he anticipates that there will be enough bids to hold an auction on Tuesday. But first his team will spend the weekend making sure the bids pass muster.

“We have to evaluate the bids and confirm that they’re qualifying bids,” he said Friday.

The minimum bid was $15.7 million, which reflected an initial “stalking horse” bid by Railroad Acquisition Holdings LLC. One other bid had been submitted by Friday and others could be coming from among the more than a dozen interested parties.

The goal is to win the best price for creditors while maintaining the rail service, Keach has said. MM&A operates about 480 miles of track in Maine, Vermont and Canada.

MM&A filed for bankruptcy after an unattended train with 72 oil tankers began rolling and derailed in Lac Megantic, Quebec, in July. About 30 buildings were destroyed in the small community 10 miles north of the Maine border.

The bidding process was being held under a cloak of secrecy. Keach was unable to identify any of the companies or to discuss financial details.

A closed-door auction is anticipated Tuesday in Portland.

In the end, the winning bidder may not be highest bid. Keach has leeway in determining what’s in the best interest of the public and of creditors.

Proceeds from the company’s sale will be used to repay creditors and victims, supplementing $25 million in insurance payouts available for wrongful death, personal injury, property damage, fire suppression and environmental impact. Critics say the cleanup alone will exceed $25 million.

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