Industrial Rail slaps Via Rail with 2 lawsuits
Two lawsuits worth nearly $32 million
Industrial Rail Services has filed two lawsuits against Via Rail Canada, alleging the national company breached the Renaissance contract and acted in bad faith by terminating the contract.
The Moncton company filed the lawsuits, worth nearly $32 million, just days before the provincial government moved in to put the company into receivership.
But the court documents, obtained by CBC News, shows the $109-million deal between the two parties was in trouble since last fall.
Via Rail terminated the uncompleted portion of its contract with Industrial Rail on April 11. Via Rail had hired Industrial Rail to refurbish 98 passenger cars.
Industrial Rail fell behind on the contract, saying it was trying to work around problems that engineers found in the cars' framing.
In the court documents, however, Industrial Rail blames Via Rail for the delays, alleging it wasn't allowed full access to inspect the cars before taking on the contract.
'All delays were as a result of the actions and inactions of Via, over which Industrial had no control.' —Industrial Rail court documents
Industrial Rail claims Via Rail acted in bad faith.
"All delays were as a result of the actions and inactions of Via, over which Industrial had no control, namely Via's change of priorities and its failure to meet court appointed deadlines," the court documents state.
Industrial Rail also claims that "as a result of the actions of Via, Industrial has suffered a loss of assets, profit and opportunity."
One lawsuit, dealing with the contract to refurbish 10 Renaissance line cars, totals about $5.6 million.
The other claim, which covers a second contract to refurbish LRC cars, totals about $26 million.
The receivership case is due to return to the courts in the coming weeks.
The New Brunswick government is seeking a court-appointed receiver for Industrial Rail Services, saying the company has failed to repay it loans, according to court documents.
The provincial government has said it backed the company with $22.5 million in loans and guarantees.
Nearly 200 people worked at Industrial Rail.
The company is a full-service locomotive and passenger railcar facility specializing in equipment repairs, remanufacturing, modifications, and refurbishment.