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November 30, 2006

Update: Judge won't waive Derderians' $1 million fine

PROVIDENCE -- A federal bankruptcy judge refused to wipe out Michael and Jeffrey Derderians' $1.06 million fine this afternoon as part of The Station nightclub coowners' bankruptcy proceedings.

The Derderians did not have the required workers compensation insurance for their employees the night of the February 2003 fire that killed 100 people and injured another 200. The state fined them $1.06 million as a result.

Their lawyers argued today that the fines should be wiped out as part of the brothers' bankruptcy proceedings. But a lawyer for the government said that federal statutes don't allow government fines to be discharged in bankruptcy cases.

The judge agreed, noting that federal statutes clearly exempt government fines from bankruptcy proceedings.

The issue now goes back to the state workers compensation court. Two years ago, a judge there ruled that the Derderians' were personally liable for the fine. The Derderian's had planned to appeal that decision, but the appeal was delayed while the bankruptcy judge decided the case that was heard today.

Now, a three-judge panel of the workers compensation court will hear the Derderians' appeal of the original decision that they were personally liable for the $1.06 million fine. Whichever way the appeals board decides, the issue is expected to end up in the state Supreme Court.

-- Projo.com staff writer Steve Peoples with reports from Journal staff writer Lynn Arditi

Posted by Steve Peoples  at 3:17 PM | Permalink

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