Caroselli, Beachler & Coleman, L.L.C.

Defendant bankruptcy's effects on a Pennsylvania liability claim

Petitioners who seek bankruptcy protection are shielded from creditors. Debts that are not secured are discharged, which removes liability for the debt. Defendants in bankruptcy can be challenging for wrongful death attorneys and the plaintiffs they represent.

The family of an Allegheny County accident victim has new legal options to consider when a case is upended by a defendant's formal insolvency. The outcome of the lawsuit can depend upon the difference between the filing dates for the liability claim and the bankruptcy.

A train engineer's widow is fighting to have her wrongful death case advanced in the wake of the bankruptcy of one of the defendants. Montreal, Maine & Atlantic Railway filed Chapter 11, after a disastrous runaway train derailment in July. The crash and subsequent explosion leveled dozens of buildings in a Canadian town and killed 47 people.

The widow's claim is unrelated. The plaintiff's husband, an Arcelor-Mittal Railways Inc. engineer, died in an offloading accident last year. Montreal, Maine & Atlantic Railway owned a railroad car containing two rolls -- 3,000 pounds -- of newsprint being delivered to Philadelphia newspaper publishers.

The immense rolls fell onto the accident victim, when the engineer opened the rail car door. The 43-year-old man died because he could not breathe, after suffering traumatic crush injuries.

The Pennsylvania lawsuit, filed months before the railroad bankruptcy, blamed Montreal, Maine & Atlantic Railway for failing to secure the heavy load. Also named were the victim's employer and parent company, the Philadelphia Media Network and the papers' newsprint supplier.

The widow asked the bankruptcy court to let the case proceed, against a bankruptcy trustee's assertions that other creditors would suffer. The plaintiff argued the railroad's $50 million insurance policy easily would cover the wrongful death claim.

Legal claims are unsecured debts, dischargeable during bankruptcy. Bankruptcy courts make exceptions, which is the reason plaintiffs suing bankrupt defendants should not give up.


Source: 
pressherald.com, "Widow seeks permission to continue lawsuit against Maine railroad" J. Craig Anderson, Oct. 24, 2013

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