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March 21, 2008

Court papers spell out tentative Station fire payments

PROVIDENCE -- Lawyers representing victims of The Station nightclub fire and some of the parties they have sued have filed court papers giving more details of some of the proposed settlements being offered in the civil cases now pending in U.S. District Court.

So far, there is a pool of settlement money totaling $71.5 million being offered to those who lost loved ones in the fire and others who were injured.

Last September, lawyers for the victims said that several parties had together agreed to pay $13.5 million of that total. Now, in newly filed court papers, the amounts each of those parties has tentatively agreed to pay is being disclosed.

Celotex Corp., which manufactured the SoundStop board that the owners of The Station -- Michael and Jeffrey Derderian -- installed in the ceiling of the drummer’s alcove and elsewhere in the nightclub, is offering $1.5 million to the victims.

Luna Tech Inc., of Alabama -- and two of its European subsidiaries -- which according to the lawsuits, manufactured the fireworks used by the band Great White the night of the fire, and High Tech Special Effects Inc., a Tennessee company that allegedly sold the fireworks to Great White, have together offered $6 million.

Sparks from the fireworks that were set off by Great White’s manager, Daniel Biechele, ignited highly flammable polyurethane foam that the Derderians installed as soundproofing in the West Warwick club the night of Feb. 20, 2003. One hundred people died as a result of the fire; more than 200 others were injured.

The newly filed court papers also show that Joseph LaFontaine, of Warwick, owner of New England Custom Alarm, the company that installed the fire-alarm system at the club before the Derderians purchased it, has offered $1 million.

Also, Triton Realty and Raymond Villanova, owners of building where The Station was located, together with several related entities have offered $5 million.

These settlement agreements are tentative at this point and no money will be distributed to the victims anytime soon. They are contingent upon the plaintiffs and Senior U.S. District Court Judge Ronald R. Lagueux agreeing to them. The judge must make a determination that each settlement offered is being made in good faith before disbursement of any funds.

-- Journal staff writer Tracy Breton

Each settlement offer is also subject to Lagueux’s approval of an allocation plan currently being devised by a court-appointed special master, Duke University law Prof. Francis E. McGovern. McGovern has been authorized to come up with a formula for disbursement of settlement proceeds. Not every plaintiff will share equally in whatever proceeds are given out. The matrix being devised by McGovern takes into account such things as severity of injury and number of dependent survivors.

There’s also another condition: Before any money is put into the pot, the lawyers representing those who want to settle want some assurance that if they pay up now, they won’t be on the hook for more money later if the case goes to trial and other defendants who don’t settle are found liable and then try to come after them for part of the verdict.

In 2006, the General Assembly enacted a law aimed at facilitating out-of-court settlements in mass tort cases. Legal experts have predicted that the legislation could result in monetary settlements with some of the seemingly most culpable defendants who have little insurance and few assets to reach settlements with The Station fire victims. The law was modeled after one that was enacted to pay back credit-union depositors during the state’s banking crisis in 1991.

Those parties that have offered tentative settlement agreements want to make sure that they will not be forced to honor them if any of the non-settling defendants seeks to challenge this newly-enacted Rhode Island law and an appellate court rules the new law unconstitutional.

Posted by Mike McKinney at 5:05 PM | Permalink

March 21, 2008

Court papers spell out tentative Station fire payments

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