Some Station Fire victims in dire straits while waiting for settlement money

 

 

Judy O’Brien sits in her kitchen in Warwick, nervously smoking Newport cigarettes and sipping iced coffee. A wad of receipts and unpaid bills, wrapped in thick rubberbands, stares her in the face. She’s made them the centerpiece on the table where she eats her meals, when she has money to buy groceries.

 

O’Brien lost her oldest son, 29-year-old Robert L. Reisner III, in The Station nightclub fire on Feb. 20, 2003. She expects to receive a hefty settlement from the $176 million that’s been offered by dozens of parties that were sued in U.S. District Court by the fire victims and their families. But it looks like the pay-outs are still months away and O’Brien, like many of the victims of the nightclub catastrophic fire, is so desperate for money that she’s had to declare bankruptcy to stave off creditors.

 

A Providence Journal review of bankruptcy court records in Rhode Island, Connecticut and Massachusetts shows that at least a dozen fire victims and their families have sought bankruptcy protection since the fire — a process that halts collection activity, including hounding letters and phone calls from bill collectors.

 

Some victims have also lost their homes to foreclosure. Others have had cars repossessed. Some have recovered enough from their injuries to go back to work only to be laid off in recent months.

To avoid eviction, some have turned to companies that advertise on TV and the Internet to get advances against their yet-to-be received court settlements –– at interest rates that would make all but the most needy of borrowers walk the other way.

 

Last spring, Dorothy Pimentel, the 41-year-old mother of four teenage children whose husband, Carlos, died in the nightclub fire, lost the modest West Warwick house she’d bought with her spouse about 12 years earlier for $70,000. She’d refinanced after her husband’s death but then couldn’t keep up with the loan payments or a repayment plan fashioned during bankruptcy.

 

At the time she filed for bankruptcy protection, Pimentel had two jobs –– as a food service worker at West Warwick High School and part-time at H&R Block. Her family was receiving Social Security survivors’ benefits. But she claimed in a court filing that she had just $60 in cash on hand and only $300 in savings. Pimental had virtually no other debt except her $1,179 monthly mortgage. The bank foreclosed after she fell almost $20,000 behind in her payments. The catastrophic fire at The Station in West Warwick, took 100 lives and injured more than 200 people . Most of the victims were working class people; court records show that dozens of the patrons had filed bankruptcy petitions in the years leading up to the fire and were on precarious financial footing at the time of the blaze.

According to the office of General Treasurer Frank T. Caprio, 222 Station fire victims and their survivors have received a total of $1,959,661from the Rhode Island Crime Victims Compensation Fund as they await their money from their federal lawsuits. But that hasn’t provided a lot of money to individual claimants. Some who lost a family member in the fire or were horribly burned received $25,000–– the maximum award allowed–– but many others have received very little. One applicant got just $62.85.

 

At a recent hearing in federal court in Providence , lawyer Mark Mandell, who represents more than 100 of The Station fire victims, told U.S. Magistrate Judge David L. Martin that the victims are in dire straits and that it was time to move things along.

 

“Our clients are in need,” he told the judge. “Time is of the essence for our clients. We are very much concerned for them…about the welfare of our clients.”

 

It has been six years since The Station fire which broke out the night of Feb. 20, 2003 when the rock band Great White set off pyrotechnics inside the West Warwick nightclub. The fireworks ignited highly flammable polyurethane packing foam that had been installed as soundproofing around the stage. Settlement money has been offered by defendants to end the case, including corporations that allegedly made the foam and sponsors of the Great White show, among them beer manufacturer Anheuser-Busch. Clear Channel Broadcasting, whose local rock station ran advertisements for the concert and whose disc jockey was a master of ceremonies, also contributed settlement money, as have members of Great White.

 

Lawyers are hoping to distribute the money to the fire victims this summer but much remains to be done before then. A neutral verification expert has just finished collecting medical forms from each victim who filed for money damages to verify their injuries. A trust fund needs to be set up and guardians appointed for minors.

 

According to a grid created by a court-appointed special master, the most badly burned victims — those who were hospitalized the longest — stand to become millionaires, though none of the victims has yet been told exactly what they’ll receive. Those who lost loved ones have been told they’ll receive hundreds of thousands of dollars. But waiting for the money is “killing me,” says Judy O’Brien.

“I lost two incomes after the fire” –– Rob’s, and rent from a roommate who shared the $500-a-month Coventry apartment with O’Brien and her son . “I don’t even have a car. I can’t get a legal loan because I don’t make enough money,” she says.

 

O’Brien is walking a financial tightrope. Because of her medical problems, her income has come from Social Security disability payments for more than two decades. After she lost her son in the fire, she says she was diagnosed with post-traumatic stress, diabetes, fibromyalgia and degenerative osteoarthritis.

 

When Rob was alive, he helped pay their expenses. But once he perished , O’Brien was left to support herself solely on her $700 a month Social Security disability checks. She says she had to move to government-subsidized housing in Warwick, where the rent is $209 per month. But she hasn’t had a car in more than seven months because her son, Corey, who’s unemployed, wrecked her 9-year-old Saturn which she’d bought with a loan. A replacement car that she’d bought with another loan broke down and she couldn’t afford to repair it.

 

But it’s her debt –– and inability to get traditional forms of credit–– that make her cry.

O’Brien, who’s divorced, filed for bankruptcy protection in 2006. She listed $142,594 in debts. There was $101,335 in student loan debt she incurred while studying part-time for a bachelor’s degree –– never completed –– in paralegal studies. She owed money to on-line businesses that give loans, at high interest rates, as pay-day advances ––though in O’Brien’s case, there are no paydays, just government disability checks. She owes $15,000 to a neighbor in her housing complex who took pity on her after the loss of her son.

 

O’Brien and her two surviving sons received $25,000 from the Crime Victims’ Compensation Fund after the fire but all that money has been spent. O’Brien says things have gotten so bad that she doesn’t have enough money to cover her rent, laundry, groceries, phone and co-pays for prescription medicine. She’s received help from her church and, for awhile after the fire, also got help from the Station Fire Family Fund.

 

“But when I asked the Family Fund for money this Thanksgiving and Christmas so I could get a store card for Wal-Mart and a Stop & Shop card for food, they told me no, that the only money given out now is to survivors who were in the fire and I don’t qualify for that.”

Asked how she pays her current bills every month –– the old ones are on hold in bankruptcy –– O’Brien says, “It becomes a major project. I have a choice ––my meds, my wash or my food and all I do is cry and cry and cry. I cry all the time.”

 

“By the third week of the month, I’m totally broke. Every month, I have my mother drive me to the Check & Go on Bald Hill Road near Strawberries. It costs me $63.75 to get a $425 advance on my SSDI.” O’Brien’s on a first-name basis with all the people who work there. “It’s like a trap you can’t get out of,” she says.

 

O’Brien said Mandell, her lawyer in her federal lawsuit, has counseled her not to try to cash-in on her anticipated settlement from one of the finance companies that offer money up front in return for future payments. Last year, Superior Court Judge Netti C. Vogel refused to approve a transaction that would have had a 28-year-old woman giving up more than 60 percent of a structured settlement. Vogel said the offer was made by “vultures.”

 

But other Station fire victims say they are so hard up for money, they are turning to such companies in advance of their pay-outs.

 

Paul and Karen Gordon, of West Warwick, who suffered injuries in the nightclub fire and are awaiting settlement proceeds, turned to J.G. Wentworth of Bryn Mawr, Pa. Wentworth offers lawsuit advances. .Paul Gordon said he learned about the company while watching TV.

 

They wouldn’t have had to borrow the money, he said, if the two of them were still working. Karen Gordon lost her job as a nursing home housekeeper last September; then he was laid off from his construction job and had to wait 10 weeks for the unemployment checks to start.

 

The Gordons got $3,700 from Wentworth so they could pay their $900-a-month- rent, some utility bills and have some money for a car trip they made to Florida in recent weeks to visit Paul’s parents and visit Sea World. The fee for the advance was $700, Paul Gordon says, nearly 20 percent.