Montreal, Maine and Atlantic Railway
| Company type | Private |
|---|---|
| Industry | Rail transport |
| Founded | 2002 |
| Defunct | 2014 |
| Fate | Filed for bankruptcy protection after Lac-Mégantic disaster; assets sold to Railroad Acquisition Holdings, LLC |
| Headquarters | Hermon , United States |
Area served | Maine, Vermont, Quebec |
Key people | Robert Grindrod (CEO) |
| Products | Freight rail transport (no passenger services except tourist train in Quebec) |
Number of employees | Approximately 350 (2003), reduced to 175 (2010) |
The Montreal, Maine and Atlantic Railway (MMA) operated as a Class II railroad freight carrier across Maine, Vermont, and Quebec between 2002 and 2014, with its main office located in Hermon, Maine. Its Canadian branch, known as the Montreal, Maine and Atlantic Canada Company, was based in Farnham, Quebec. Passenger services were not part of MMA’s operations, aside from a separately owned tourist train running on a limited section within Quebec.
Following the catastrophic Lac-Mégantic rail disaster in August 2013—which resulted in roughly $200 million in damages and 47 deaths—MMA filed for bankruptcy protection. This tragedy had a profound negative effect on the company’s financial stability and competitive standing.
In January 2014, Railroad Acquisition Holdings, LLC, a subsidiary of Fortress Investment Group, purchased MMA’s assets at auction. The deal excluded fifteen locomotives valued at $1.6 million. Bankruptcy courts sanctioned the sale, with asset transfer anticipated by March 31, 2014. Railroad Acquisition Holdings then formed the Central Maine and Quebec Railway (CM&Q) to manage MMA’s previous routes. Subsequently, in June 2020, CM&Q was acquired by Canadian Pacific Railway, significantly strengthening Canadian Pacific’s regional footprint and market share.
2003 Asset Acquisition
Established in October 2002, MMA was primarily owned by Rail World (holding 72.8% with an investment of $54.7 million) and Caisse de dépôt et placement du Québec (with a 12.8% stake worth $7 million), along with fifteen other private investors. The company took over assets from the bankruptcy of holding firm Iron Road Railways in 2002, which included subsidiaries such as the Bangor & Aroostook Railroad (BAR) and Canadian American Railroad (CDAC).
The transaction finalized in January 2003, marking the start of MMA’s operations over approximately of track. At that time, MMA operated about 25 trains daily and employed roughly 350 workers. The MMA emblem drew inspiration from the Bangor and Aroostook Railroad’s logo.
2003-2010 Operational Downsizing
Soon after beginning operations, MMA lost two significant customers when Great Northern Paper’s mills in Millinocket and East Millinocket went bankrupt. This forced the company to reduce its workforce to 275 employees and implement a 40% cut in salaries. The downturn in pulp, paper, and lumber sectors—which originally made up about 60% of MMA’s freight volume—caused the company's valuation to plummet from $60 million in 2003 to nearly worthless by 2008, prompting investors to write down their holdings substantially.
Additional staff reductions took place in 2006 and 2008 amid ongoing profitability challenges. By spring 2010, MMA adopted remote control technology allowing train crews to be reduced from two members to one, trimming personnel numbers to 175 and yielding estimated annual wage savings of $4.5 million. That year also saw MMA sell 233 miles of deteriorated track to the state for $20 million; $7 million of this amount was applied toward repaying a loan from shareholder la Caisse de dépôt et placement du Québec. Notably, MMA was the only railroad in Maine utilizing single-person crews operating with remote controls rather than traditional two-person teams.
Due to constrained maintenance budgets, severe winter conditions, and operational shifts like single-person crews, MMA experienced an accident rate between 2003 and 2013 of 36.1 incidents per million miles—exceeding twice the North American average of 14.6 per million miles.
Freight volumes continued to decline as manufacturers increasingly favored trucking for quicker just-in-time deliveries, further challenging MMA’s market position and financial health.
2008 Eastern Townships passenger train initiative
In 2008, a plan was examined to reinstate passenger rail service along the 150 km corridor between Montréal and Sherbrooke, but it ultimately was not executed. The segment owned by MMA from St-Jean-sur-Richelieu to Sherbrooke required significant investment in track and bridge rehabilitation to accommodate Via Rail trains traveling at speeds of up to 110 km/h.
2011 Twin Rivers Paper conflict
In 2011, Twin Rivers Paper Company, the principal customer on the former BAR line, became involved in a lawsuit in U.S. District Court seeking direct access to Canadian National Railway (CN). The company cited MMA's "excessive rates, unreliable service, and poor management" as key issues. MMA’s charges for transporting railcars over the 24-mile stretch from Madawaska, ME to the CN interchange at St. Leonard, NB exceeded CN’s fees for the onward journey to Montreal.
Twin Rivers Paper consistently raised concerns regarding MMA’s failure to meet deadlines and inadequate track upkeep. After unsuccessful legal efforts to bypass MMA’s local monopoly, Twin Rivers resorted to transferring freight by truck across the Canada–U.S. border to Edmundston, NB, enabling direct loading onto CN trains.
2010 Northern Maine rail line abandonment
In February 2010, MMA submitted a notice of intent to abandon a portion of its northern Maine track between Madawaska and Millinocket. This segment was part of the original Bangor & Aroostook Railroad main line acquired in 2003. Much of this infrastructure was deteriorated, restricting freight train speeds.
The affected routes served Penobscot and Aroostook Counties, including communities such as Houlton, Presque Isle, Caribou, and Fort Kent. Lines running between Millinocket and Montreal, Brownville and Searsport, as well as Madawaska to Van Buren were not part of this abandonment.
MMA justified the move by citing operating deficits that jeopardized its financial viability. The Surface Transportation Board (STB) postponed decisions after state officials pursued negotiations aimed at preventing abandonment due to anticipated economic consequences. State legislators proposed purchasing the line and contracting freight operations, mirroring Vermont’s approach.
On October 20, 2010, MMA agreed to sell 233 miles of track to the State of Maine for $20.1 million. The STB granted abandonment approval on December 28, facilitating the transaction. In April 2011, Maine contracted Irving Transportation Services—a subsidiary of J.D. Irving Limited—to operate the line. Between 2011 and 2012, federally funded repairs totaling $10.5 million were completed, including replacement of 50,000 ties and restoration of the rail bed.
Irving Transportation Services, which owns New Brunswick Railway Company along with New Brunswick Southern Railway and Eastern Maine Railway subsidiaries, established Maine Northern Railway in June 2011 to oversee operations. This initiative involved hiring approximately 30 employees and acquiring additional locomotives and rolling stock. In December 2011, MMA sold its remaining track segment between Madawaska and Van Buren to Irving.
Despite these developments, MMA continued experiencing annual losses estimated at $4-5 million in 2011. Efforts to sell the company failed due to non-transferable U.S. government loans that supported MMA’s operations.
2012 Sainte-Rosalie line discontinuation
On July 16, 2012, MMA halted freight operations on the 38 km Ste Rosalie Subdivision that connected its main line at Farnham, Quebec with Sainte-Rosalie, Quebec in the Montérégie region. An inspection conducted by Transport Canada in May 2012 determined that the line did not comply with updated "Rules Respecting Track Safety," attributing deficiencies to deferred maintenance resulting from cost-cutting measures implemented between 2002 and 2012. MMA invoked these new regulations as force majeure grounds to cease service without adhering to Section 140 of the Canada Transportation Act, which mandates a one-year notice prior to discontinuing railway lines.
Following this suspension, two local businesses—F. Ménard Inc. and Meunerie Côté-Paquet—initiated legal action against MMA. In 2013, MMA pursued abandonment proceedings and proposed selling the right-of-way to local municipalities; given the deteriorated state of the track infrastructure, such a sale would likely result in rail removal and conversion into a rail trail.
2012 Oil Shipments
Since its establishment in 2002, MMA faced ongoing financial difficulties, primarily due to declines in its key forestry markets in Maine and Quebec, which were further exacerbated by the Great Recession from 2008 to 2010. To manage expenses and reduce debt, MMA downsized its workforce in 2010 and sold portions of its track in northern Maine. In 2012, the company altered its business model by adopting oil-by-rail transportation, which enhanced its financial standing, allowing it to rehire employees and acquire additional locomotives, specifically refurbished General Electric C39-8 units. The crude oil transported was intended for the Irving Oil Refinery located in Saint John, New Brunswick.
By early 2013, environmental advocates and state officials in Maine expressed apprehension regarding the increased volume of crude oil shipments on MMA and competitor Pan Am Railways following minor derailments. The Maine Department of Environmental Protection pointed out potential threats to ecologically sensitive water bodies adjacent to the rail corridors. In a March 2013 interview, MMA CEO Robert Grindrod downplayed these spill concerns, noting that despite transporting large quantities of oil, no incidents had been reported.
2013 Frontenac Fuel Spill
On June 11, 2013, an MMA locomotive experienced a diesel fuel leak at Frontenac, located roughly east of Lac-Mégantic, Quebec, when its fuel tank was punctured during switching maneuvers.
2013 Lac-Mégantic Disaster
On July 6, 2013, MMA train number 2, carrying crude oil, derailed in downtown Lac-Mégantic, Quebec. The unattended runaway train had been left after a crew change in Nantes and came off the tracks around 1:20 AM. The resulting explosions devastated the town center and caused an estimated 47 fatalities. This tragedy stands as the most severe rail accident in Canada since 1864. Notably, the locomotives detached from the freight cars prior to the derailment.
Rail World’s president and CEO Edward Burkhardt visited Lac-Mégantic on July 10 but faced significant public criticism. The incident brought MMA's safety protocols under intense scrutiny; the train had been inadequately secured on a -0.92% grade leading into Lac-Mégantic. A local fire department had turned off the locomotive’s engine to extinguish a fire, likely releasing the air brakes and allowing the loaded oil cars to roll downhill due to insufficient hand brakes applied.
Burkhardt refused to reveal details about the company’s liability insurance but admitted uncertainty regarding MMA’s future viability. Investigations uncovered deteriorated track conditions with reports of decayed ties and loose spikes. After this catastrophe, MMA halted services between Lac-Mégantic and Jackman, Maine, disrupting critical rail connections between Maine and Quebec. By July 2013, the company had laid off 88 employees across Canada and Maine as revenues on these lines plummeted by two-thirds to approximately $1 million monthly. Burkhardt cautioned that this event might jeopardize MMA’s survival and adversely affect both staff and clientele.
By July 30, 2013, the Maine Department of Transportation had formulated contingency arrangements for MMA’s customers by coordinating with other freight rail companies to sustain service if MMA ceased operations. Due to their monopolistic position in many regions, U.S. federal regulations require bankrupt rail lines to continue operating until new ownership is secured.
On August 6, 2013, Burkhardt announced that MMA would discontinue transporting oil via rail altogether.
2013 Financial Challenges and Bankruptcy Proceedings
In the aftermath of the Lac-Mégantic tragedy, Rail World, the parent corporation, encountered lawsuits amounting to hundreds of millions alongside substantial environmental remediation expenses. Former MMA employees who were dismissed faced difficulties receiving their severance payments, and numerous supplier payments were returned due to insufficient funds.
On August 7, 2013, MMA sought bankruptcy protection under Quebec’s Companies' Creditors Arrangement Act as well as Chapter 11 in the United States. The company’s liabilities surpassed its assets—including anticipated insurance recoveries—a direct consequence of the derailment incident. MMA possessed U.S. assets valued between $50 and $100 million, while Canadian assets, which included rail infrastructure, were under $18 million. Outstanding debts included $27.5 million from a 2005 loan through the Federal Railroad Administration, $6 million on a 2009 credit line from Wheeling and Lake Erie Railway, and $3.5 million owed to other creditors. Among MMA Canada’s largest unsecured creditors was J.D. Irving, owner of NBM Railways, with claims totaling $2.35 million. The overall financial impact of the derailment exceeded $200 million; MMA held liability insurance coverage of $25 million and had only $274,000 available in bank accounts at the time of bankruptcy filing.
After entering bankruptcy protection, 85 employees remained employed to sustain operations except in Lac-Mégantic where rail access was obstructed; by August 20, fifteen workers had been laid off. On August 13, the Canadian Transportation Agency moved to revoke MMA’s certificate of fitness due to inadequate liability insurance coverage, effectively prohibiting its Canadian operations; this suspension was extended until April 1, 2014. The Québec Superior Court allocated funds from MMA’s bankruptcy estate to compensate future victims because of insurance deductibles.
Following inspections revealing deteriorated track conditions near a propane facility, Transport Canada closed portions of MMA’s line in September. In October, further inspections resulted in embargoing the entire stretch between Lennoxville and Lac-Mégantic. The Orford Express tourist train, which operated on MMA tracks with its own liability coverage valued between $50 and $100 million, continued service but canceled a special trip to Lac-Mégantic due to the embargo.
Rail traffic resumed through Lac-Mégantic on December 18, 2013 under stringent restrictions: transportation of hazardous materials was prohibited; advance disclosure of cargo manifests was mandated; dual crew operation was required; speed limits were set at 16 km/h; and parking within four kilometers of the town center was forbidden. The initial test shipment carried particle board from Tafisa’s nearby manufacturing plant. Although there were plans to reroute the railway outside the town limits between Nantes and Frontenac, no schedule had been established.
2014 Asset Sale
In January 2014, Railroad Acquisition Holdings, LLC—a subsidiary of Fortress Investment Group—acquired MMA’s assets at auction with the intent to continue operations. Their winning bid of US$14.25 million in December 2013 was the sole offer for the entire MMA network. By mid-February 2014, Central Maine and Quebec Railway (CMQ), the new railroad entity, was incorporated in both Canada and the United States; the transaction was completed in March.
Other bids included an $8 million joint proposal from J.D. Irving Inc.’s Eastern Maine Railway and Pan-Am’s Springfield Terminal Railway targeting Maine segments, as well as a $750,000 bid from Washington County Railroad for the Newport line.
Following court approval of the sale, Great Northern Paper announced a temporary 16-week shutdown of its East Millinocket mill. On January 30, MMA trustees initiated a lawsuit in U.S. courts alleging negligence by World Fuel Services for incorrectly labeling the hazardous cargo on the train, asserting that accurate disclosure would have averted the disaster.
On May 12, 2014, MMA faced criminal negligence charges totaling 47 counts; key personnel including engineer Thomas Harding, operations manager Jean DeMaître, and rail traffic controller Richard Labrie were arrested and formally charged in Lac-Mégantic court.
Before the derailment occurred, MMA employed approximately 179 individuals.
Interchange points
Boston and Maine (B&M) / Pan Am Railways (PAR)
- Newport, Vermont (connected through Washington County Railroad (WACR))
Canadian National Railway (CN)
- Saint John, New Brunswick (accessed via New Brunswick Southern Railway (NBSR) / Eastern Maine Railway (EMR))
- Sherbrooke, Quebec (linked by St. Lawrence and Atlantic Railroad (Québec) (SLQ))
- Saint-Jean-sur-Richelieu, Quebec
- St. Leonard, New Brunswick (through Maine Northern Railway (MNR))
- Sainte-Rosalie, Quebec
Canadian Pacific Railway (CP)
- Saint-Jean-sur-Richelieu, Quebec
Claremont & Concord Railroad (CCR)
- Newport, Vermont (via Washington County Railroad (WACR))
Eastern Maine Railway (EMR) / New Brunswick Southern Railway (NBSR)
- Brownville Junction, Maine
Maine Northern Railway (MNR)
- Millinocket, Maine
New England Central Railroad (NECR)
- Newport, Vermont (connected through Washington County Railroad (WACR))
Maine Central Railroad (MEC) / Pan Am Railways (PAR)
- Mattawamkeag, Maine (via NBSR/EMR)
- Hermon, Maine (Northern Maine Junction)
St. Lawrence and Atlantic Railroad (Québec) (SLQ) / St. Lawrence and Atlantic Railroad (SLA)
- Lennoxville, Quebec
Washington County Railroad (WACR)
- Newport, Vermont
See also
External links
- Montreal, Maine and Atlantic Railway – official site (Archived January 3, 2014)