Rhode Island Nightclub Owners Fined $1M For Insurance Shortage

April 10, 2003

State labor officials issued a fine of more than $1 million against owners of a nightclub where a fire during a GREAT WHITE concert killed 99 people because the company failed to get workers' compensation insurance, according to the Associated Press.

The Department of Labor and Training also referred the case Wednesday to the attorney general for criminal prosecution. Attorney General Patrick Lynch said he was evaluating possible charges, adding that the workers' comp issue was "just one part of our overall investigation."

The labor department fined brothers Jeffrey and Michael Derderian the maximum $1,000 a day for the nearly three years they owned the club for failure to carry workers' compensation insurance as required by law. The amount comes to a little over $1 million.

At a hearing last week, the Derderians' attorneys acknowledged the two didn't have the insurance from the time their company, Derco LLC, bought The Station nightclub in West Warwick on March 22, 2000, until the Feb. 20 fire.

Attorney Jeff Pine, representing Jeffrey Derderian, has said it was not out of "malice or ill will."

Pine and attorney Kathleen Hagerty, who represents Michael Derderian, said they would appeal the ruling to Workers' Compensation Court.

Pine said Thursday there were about 16 employees working at The Station the night of the fire, four of whom died. He declined to say how many were injured.

If there had been workers' comp insurance, the families of the dead employees would have been eligible for $15,000 for burial and other expenses plus a portion of the deceased's lost wages, state officials said. Depending on the nature of the injuries and extent of disability, the injured could also have qualified for compensation.

Also Wednesday, private attorneys for fire survivors and victims' families said investigators searching the rubble of the nightclub had found a partly burned document suggesting the owners had overstated the building's capacity for the concert.

The unsigned contract between the band GREAT WHITE, whose pyrotechnic display set off the fire, and The Station shows the capacity as 550, the attorneys say. Town officials have said the maximum capacity was 404, if all the furniture was removed.

Hagerty said neither brother drew up the contract and the 550 number was generated by a national guide for booking agents.

Authorities have not determined how many people were actually in the building when the pyrotechnics display set the soundproofing foam on fire. The blaze melted the hand clicker that kept track of patrons.

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