JEFFREY DERDERIAN

MICHAEL DERDERIAN

PROVIDENCE –– Michael and Jeffrey Derderian, the owners of The Station nightclub where a fire claimed 100 lives and injured more than 200, have agreed to pay $813,218.82 to the victims to settle a raft of civil suits brought against them in federal court.

The amount represents the balance of a $1-million liability insurance policy the brothers had on their West Warwick club through the Essex Insurance Company.

The rest of the money from that policy –– a little over $186,000 –– has already been paid out to some of the victims for medical expenses they incurred as a result of the disastrous fire at the nightclub.

After the Feb. 20, 2003, fire, the Derderians filed for bankruptcy protection. Their debts –– except for the insurance policy –– were discharged by U.S. Bankruptcy Judge Arthur N. Votolato on Sept. 1, 2006. They are now immune from further liability as it pertains to the fire victims.

The tentative settlement agreement offered by the Derderians, announced yesterday afternoon in a federal court filing, also covers the corporate entity known as DERCO LLC through which they operated the nightclub. The offer brings the pot of money being offered to the fire victims to about $176 million.

The Derderians are among the last defendants to offer settlements to the fire victims. Their settlement agreement was announced just one day after the announcement of a similar agreement with Great White, the rock band whose pyrotechnics ignited the fire.

Like all the other proposed settlements, the one offered by the Derderians is premised on a number of conditions. It must be approved by all the victims and by the judge who is presiding over the mass tort case, Senior U.S. District Judge Ronald R. Lagueux. It is also contingent on the court’s approval of an allocation plan being developed by a special master, Duke University Law Prof. Francis E. McGovern, and the approval of the bankruptcy court.

The settlement agreement says that the bankruptcy court may reduce the amount of the proposed settlement to pay unspecified fees and expenses.

In September 2006, the Derderians each pleaded no-contest to 100 counts of involuntary manslaughter –– one count for each person who died in the fire.

Michael Derderian was sentenced to four years at the Adult Correctional Institutions. He is scheduled to be released one year early from his sentence, in October 2009, over the opposition of victims’ families.

Jeffrey Derderian received a sentence of community service and no jail time. He completed 534 hours of community service last fall.

The brothers were faulted for installing highly flammable polyurethane foam as soundproofing in their club; allowing overcrowding at The Station; failing to provide proper exits; and allowing musicians to set off fireworks inside the club without the required permits.

Their negligence, the lawsuits allege, “caused deaths and severe personal injuries to plaintiffs.”

The fire at The Station broke out when Great White started its show with a display of pyrotechnics. Within minutes, the wood-frame building was a death trap filled with flames and toxic smoke. The club went dark. There were no fire sprinklers. The building was totally engulfed within three minutes; many of those who died were caught in a stampede for the door.

Michael Derderian was out-of-state the night of the fire; Jeffrey was at the club when the fire broke out.

After the fire, lawyers representing the victims sued nearly 100 defendants. Settlement money has been offered by most of them, including corporations that allegedly made the highly flammable foam that lined the walls of the nightclub and sponsors of the Great White show, among them the beer manufacturer Anheuser-Busch.

The Town of West Warwick and the State of Rhode Island have each agreed to pay the fire victims $10 million based on victims’ claims that they failed to properly inspect The Station and cite its owners for the flammable foam, and for allowing overcrowding at the Great White concert.

tbreton@projo.com