Digital Extra: The Station Fire

Besides banks and other lenders, The Station owners include in their bankruptcy filing the families of the 100 people killed in the 2003 blaze, as well as survivors.

01:00 AM EDT on Tuesday, October 4, 2005

BY LYNN ARDITI
Journal Staff Writer

The names of more than 500 people with potential claims against the owners of The Station nightclub appeared on a list of creditors filed yesterday in federal bankruptcy court.

Besides banks, credit-card companies and other lenders, the nightclub's owners, Jeffrey A. and Michael A. Derderian, list as potential creditors the families of the 100 people killed in the 2003 blaze, the estates of the dead, as well as survivors of the fire.

The fire killed 100 people and injured more than 200.

The Derderians filed for Chapter 7 bankruptcy protection two weeks ago, saying in court documents that they each have assets of less than $50,000 and debts estimated at more than $100 million. Their company, Derco LLC, which owned the nightclub, also has filed for bankruptcy.

The filing came seven days before the Derderians were to stand trial on civil charges that they failed to pay more than $200,000 in workers' compensation insurance benefits to the families of four nightclub workers killed in the fire.

Chapter 7 bankruptcy protection generally wipes out all civil claims against the filers.

The bankruptcy filing is expected to have no effect on the criminal case against the brothers. The Derderians each face 200 counts of involuntary manslaughter. They have pleaded not guilty.

Nor is the bankruptcy filing expected to have much of an impact on the fire victims' attempt to recover money in lawsuits. The civil suits name nearly 50 defendants besides the Derderians -- including foam manufacturers, a radio station and a beer company -- which have far deeper pockets.

Christopher M. Lefebvre, a bankruptcy lawyer in Pawtucket who represents the Derderians, said that about 350 of the more than 500 names on the list of potential creditors filed yesterday in federal bankruptcy court are expected to have enforceable claims as creditors against the Derderians or their company, Derco LLC.

Bankruptcy law requires that filers include anyone with a potential claim, Lefebvre said, so the list is broad and includes all the lawyers involved in the civil or criminal cases. Some people are also listed twice.

"Just from the civil complaint there were over 300 claimants," Lefebvre said, "so in this case I guess close to 350 of individual, quote, claimants/creditors."

Rhode Island Attorney General Patrick C. Lynch is listed as a potential creditor, as is the Rhode Island Department of Labor and Training. The Labor Department has fined the Derderians and Derco LLC $1.06 million for failure to purchase the mandatory workers' compensation insurance coverage for the nightclub.

The Derderians also have been ordered to pay more than $200,000 in workers' compensation benefits to the families of the nightclub employees killed in the fire.

In lieu of those benefits, the Derderians have been sending the employees' families monthly checks -- $125 for those without children and $500 for those with children -- since April, lawyers said.

Lefebvre, the Derderians' bankruptcy lawyer, said the brothers mailed out checks last weekend for this month.

"They're committed to making the payments," Lefebvre said, "and they're doing that despite at the present time there's no legal obligation to do so."

Among those who have been receiving the checks is Steven Beardsworth, a cousin of waitress Dina DeMaio, who died in the fire.

Beardsworth, of Norway, Maine, is caring for Dina's 10-year-old son, Justin.

Beardsworth said he isn't holding out any hope of the money continuing once the bankruptcy filing is approved.

"If they filed bankruptcy and they're told everything's wiped off the slate, why would they keep sending money?" he said, during a phone interview yesterday. "They said they would. They said they'd do all that they can. But we'll see."

Among the lenders listed as creditors in the bankruptcy filing are Discover, First USA Bank, MBNA, Nissan Motor Acceptance, Citi Financial, Chase Bank One, Capital One Bank, BMW Financial, American Honda Finance Co., Chase, First USA and Sovereign Bank.

With computer assistance from staff writer Paul Parker

Lynn Arditi, a Journal staff writer, can be reached by e-mail at larditi [at] projo.com