R.I. nightclub owners reach settlement in fatal fire

[September 04, 2008]  PROVIDENCE, R.I. (AP) -- The owner of the radio station that ran ads for a concert where a fire killed 100 people agreed to pay $22 million. A beer distributor that helped promote the show agreed to $16 million.

Dozens of companies, governments and individuals have reached tentative settlements totaling more than $175 million over the 2003 nightclub fire.

But barely 1 percent comes from the only two parties found to have some criminal culpability: the club owners who installed cheap packaging foam as soundproofing, and the rock band tour manager whose pyrotechnics made the foam burn like gasoline.

Jeffrey and Michael Derderian, the owners of The Station nightclub in West Warwick, have reached an $813,000 settlement with survivors and relatives of those killed, according to court papers filed Wednesday.

The settlement will be covered entirely by their insurance policy since the brothers have received bankruptcy protection that shielded them from lawsuits. It and other settlements in the case require the approval of the judge overseeing the lawsuits and the more than 300 people who are suing, among other conditions.

The agreement with the Derderians comes a day after a separate $1 million settlement with members of Great White, the 1980s rock band whose pyrotechnics triggered the Feb. 20, 2003, fire. That settlement covered Great White's tour manager, Daniel Biechele, who set off the pyrotechnics.

The back-to-back settlements are the latest in a flurry of agreements reached over the last year to resolve lawsuits over the fire.

Defendants agreeing to pay $5 million or more include Clear Channel Broadcasting, Anheuser-Busch, The Home Depot, the state of Rhode Island and the town of West Warwick.

Though the Derderians and the band were seen by prosecutors and many victims' relatives as most directly to blame, they didn't have the money to pay the millions of dollars of damages that could have been awarded in a jury trial.

Dave Kane, whose 18-year-old son Nicholas O'Neill was the youngest fire victim, said the lawsuits were more about holding people accountable than collecting money.

"People sue for $1.85 just to make the point," Kane said. "Then maybe people will say, before I overcrowd a club next time or before I put up crummy foam or whatever it is, I'm going to think because maybe I'm going to end up having to stand up for this."

The Derderians in 2006 resolved criminal charges against them by pleading no contest to 100 counts each of involuntary manslaughter. Michael Derderian was sentenced to four years in prison and will be released on parole next year; Jeffrey Derderian was spared prison time and was given probation and community service.

Biechele was released on parole in March after serving 22 months in prison for his guilty plea to 100 counts of involuntary manslaughter.

The Derderians were accused in the lawsuits of operating an unsafe nightclub, where an exit door swung the wrong way, overcrowding was permitted and foam that experts said burned like gasoline lined the walls near the stage.

The brothers did not admit any wrongdoing under the settlement, but have apologized in court to victims and have said they had no idea the foam was flammable.

The Derderians sought bankruptcy protection in 2005, estimating their debts at more than $100 million. The bankruptcy filing allowed them to avoid what could have been a hugely expensive jury verdict if the case had gone to trial.

The settlement will be drawn from their $1 million liability insurance policy, which has been whittled down to $813,218.82 because of payments to victims for medical bills.

No settlement money has yet been distributed; a Duke University law professor has been meeting with the families to create a formula to determine how much money each person suing should receive.

"It's sad, that this is what you boil down to -- that you have a formula that makes your life worth points," said Bonnie Hoisington, whose daughter, Abbie, 28, died in the fire.

[Associated Press; By ERIC TUCKER]

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