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DLT, Derderian lawyers meet on million-dollar appeal

February 6, 2013

Brothers Michael and Jeffrey Derderian listen to courtroom testimony in the trial following the Feb. 20, 2003 fire at the Station nightclub. File Photo.

WEST WARWICK— Workers’ Compensation Court Chief Judge George Healy Jr. met with lawyers representing the former owners of the Station nightclub and the Department of Labor and Training yesterday to discuss the owners’ appeal of a $1.06 million penalty for failing to provide workers at the nightclub with workers’ compensation.

Less than a week ago, Judge Healy questioned why the owners of the nightclub, Jeffrey and Michael Derderian, had not paid the penalty for failing to provide workers’ compensation insurance to its employees.

The penalty was brought against the Derderians and their company, DERCO, LLC by the Department of Labor and Training after 100 people perished, including four employees, in the nightclub fire on Feb. 20, 2003.

The fine was the maximum amount and the largest workers’ compensation penalty ever imposed by the state, according to a March 2004 Daily Times article.

According to that article, if the Derderians had workers’ compensation insurance, each of the families of the four employees that perished would have received $15,000 for burial and other expenses “plus a portion of the deceased’s lost wages.”

Although the Workers’ Compensation Court upheld the penalty in 2004, Craig Burke, court spokesman, explained that the Derderians appealed the penalty, sending the case before a panel of three judges in 2005.

Judges Debra Olsson, Janette Bertness and Edward Sowa Jr. heard the appeal on March 2, 2005, but Burke stated this was the last time the case was ever discussed.

The decision was put on hold pending results of DERCO ’s bankruptcy case.

Burke explained that because the bankruptcy case was considered a federal proceeding, the state proceeding — the appeal — was postponed.

Unfortunately, once the federal proceedings were finished in 2010, nobody from the state was notified to reinstate the state case.

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