BANGOR – Twenty-three towns settled unpaid tax claims against the Bangor and Aroostook Railroad Co. on Wednesday in federal bankruptcy court.

The total claim of the towns is $267,549 and the settlement to be paid them from the estate of B&A, which no longer is in business, is $174,296.

Wednesday’s settlement followed an agreement between the B&A estate and 19 other towns that will receive $550,000 in back taxes.

On Jan. 9, B&A sold its assets to Rail World Inc., a Chicago-based consortium, but still owed unpaid taxes to numerous Maine towns and cities.

U.S. Bankruptcy Chief Judge James B. Haines approved Wednesday’s settlement plan in federal bankruptcy court in Portland.

The 23 towns included in the settlement are: Charleston, Crystal, Fort Kent, Frankfort, Island Falls, Jackman, Oakfield, Smyrna, Stacyville, Frenchville, Grand Isle, New Limerick, Wallagrass, Ashland, Masardis, Prospect, Sherman, Greenville, Madawaska, Winterport, Stockton Springs, Searsport and LaGrange.

The 23 towns accepted the settlement, which paid them about 65 percent of what they were owed, in order to avoid expensive legal action against the B&A estate. The remaining 35 percent of the total was kept by the B&A estate as a surcharge. The trustee for the B&A estate justified the surcharge stating the towns would benefit from the sale to Rail World Inc.

Nineteen towns that did not want to pay the 35 percent surcharge hired a law firm to seek 100 percent of the money owed them.

Bangor, Hampden, Glenburn, Milo, Brownville, Medway, Patten, Presque Isle, Houlton, Portage Lake, Easton, Mapleton, Chapman, Caribou, Van Buren, Eagle Lake, Millinocket, East Millinocket and Hermon are waiting for unpaid taxes from B&A totaling $550,000.

One Eaton Peabody lawyer who is representing the 19 towns said he’s not sure exactly when the case will go to trial.

“The towns have been going through the process to get approval,” said Steve Morrell. “That process is largely completed. We’ve heard from 18 of the 19 towns we represent. There is going to be a period of time for paperwork.

“All creditors are entitled to know of the proposed settlement and comment upon it,” he added. “Because of the time to do the paperwork, get the notice out and give all creditors a chance to comment, I wouldn’t anticipate a final hearing before the first of June.”

The 19 towns expect to receive 100 percent of the money owed them, according to city leaders.

B&A sold its assets but not its name or operations to Rail World Inc. for $50 million in October. The final sale was signed Jan. 9. Rail World changed the system’s name to Montreal, Maine and Atlantic Railway.