Foam Company Offers $6.3 Million to R.I. Nightclub Fire Families

A company that sold the foam blamed for fueling a Rhode Island nightclub fire that killed 100 people has agreed to pay $6.3 million to settle lawsuits from survivors and victims’ relatives, according to court papers filed last week.

The agreement by Johnston-based American Foam Corp. brings total settlements offered in the case to roughly $153 million.

The newest tentative settlement also covers the estate of Aram DerManouelian, the company’s former president who has since died, and Barry Warner, a company salesman who lived near the club and suggested that club owners Jeffrey and Michael Derderian buy soundproofing foam to quell noise complaints from neighbors.

A phone message seeking comment from American Foam’s lawyer was not returned.

The Feb. 20, 2003, fire at The Station nightclub began when pyrotechnics for 1980s rock band Great White ignited the foam, which was used as soundproofing around the stage. The families alleged the company did not warn the nightclub owners that the foam was flammable.

American Foam sold the club $575 of foam in June 2000, three months after the Derderians became owners. Experts say the foam _ blocks of egg crate-styled polyurethane _ burns like gasoline, emits a dense smoke with toxic gases and is not suitable as acoustic insulation.

The Derderians, who pleaded no contest two years ago to involuntary manslaughter charges, have said they never knew the foam was flammable.

DerManouelian told a state grand jury investigating the fire that his company did not provide technical information on the foam it sold unless customers requested it. Warner said he never told the Derderians the foam was flammable, but also said the brothers never asked.

Warner, who had complained for years about noise at the club, told the grand jury that the Derderians came to his house to introduce themselves right after they bought the club. He said he suggested the brothers could use soundproofing foam and later dropped off a sample of foam at the club.

Warner has said he consulted with the Derderians about the foam, but did not handle the details of the purchase. But Kathleen Hagerty, an attorney for the Derderians, has disputed Warner’s account, saying Warner made the measurements in the club, and that the brothers relied on his advice.

American Foam’s insurer is offering $5 million, and the corporation itself is offering the remaining $1.3 million.

Many of the dozens of people and companies sued for the fire already have agreed to settle, including Anheuser-Busch Inc., The Home Depot, Clear Channel Broadcasting and a group of foam manufacturers. The case has been settling in piecemeal fashion since last year, with most defendants choosing not to go to trial.

The continuing pattern of settlements reduces the chance for a trial, which some victims’ relatives had wanted as a way to learn more about the circumstances leading up to the fire.

Dave Kane, whose 18-year-old son Nicholas O’Neill was among those killed, said the lawsuits were about more than money.

“It’s about saying to somebody else, ‘You better be more careful because if you do this, you’re going to pay,”‘ Kane said. “In that sense, instead of threatening them with jail time, they’re threatened with financial ruin or financial responsibility.”

The remaining defendants include the state of Rhode Island and the town of West Warwick, whose fire marshal never cited the club for the foam even though he did repeated inspections before the fire. Victims’ lawyers say negotiations are continuing.

None of the settlements is final, and no money has yet been paid to the victims. The settlement offers require approval of all the plaintiffs and the federal judge overseeing the case. Francis McGovern, a Duke University law professor, has been appointed by the judge to craft a formula to determine how much money each person suing should get.

James Gahan, who lost his 21-year-old son Jimmy, and is among those suing, said it was important that the case resolves soon so that victims struggling financially since the fire can finally receive money.

“For them, it’s critical that things be done,” Gahan said.

Michael Derderian will be free on parole next year from his four-year prison sentence, while his brother was spared jail time after their pleas to 100 counts of involuntary manslaughter.

Former Great White tour manager Daniel Biechele, who ignited the pyrotechnics, was released on parole in March after serving 22 months of his sentence.