MM&A operates an 821km network stretching from Montreal in the west to Bangor and Searsport on Maine's Atlantic coast, with branches to Newport, Vermont, and Millinocket, Maine. The railway employs 85 staff and is owned by Rail World, a regional and shortline operator based in Rosemont, Illinois.

In a statement, Mr Ed Burkhardt, chairman of MM&A and Rail World, said: "It has become apparent that the obligations of MM&A now exceed the value of its assets, including prospective insurance recoveries, as a direct result of the tragic derailment at Lac-Mégantic, adding that bankruptcy is "the best way to ensure fairness of treatment to all in these tragic circumstances".

Burkhardt says that MM&A will continue to work with the Québec Ministry of the Environment, the municipality of Lac-Mégantic, and other government authorities in the continuing environmental clean-up.

MM&A says that essential services will continue on all of its lines in Québec, Maine and Vermont, with the exception of Lac-Mégantic itself, and that service to industries at Lac-Mégantic could be restored as soon as required.

A criminal investigation into the accident is currently underway in Quebec, and the town of Lac-Mégantic is seeking financial assistance to rebuild the area devastated by the explosion.

Burkhardt said in an interview with the Montreal Gazette on August 5 that MM&A would cease carrying crude oil.