SalemNews.com, Salem, MA

December 10, 2012

Civil action may decide fate of $100K

Money is left over from blast settlement

BY ETHAN FORMAN
STAFF WRITER

---- — DANVERS — The $100,000 left over from the $7 million Danversport Trust settlement remains intact, the trust’s lawyer says, awaiting the outcome of a lawsuit against the chemical company that supplied the CAI/Arnel plant, which blew up six years ago in an explosion so great, it rocked people out of bed all over the North Shore.

“It’s there awaiting the decision of the beneficiaries to decide what to do,” said Beverly attorney Jan Schlichtmann.

About 27 people suffered minor injuries in the early morning Nov. 22, 2006, explosion, but, in what former Gov. Mitt Romney called “a Thanksgiving miracle in Danvers,” no one was killed.

With the passing last month of the blast’s six-year anniversary, some were left wondering what happened to the settlement’s leftover proceeds.

Bates Street resident Lisa Berman said she does not remember hearing anything about the $100,000 at the trust’s most recent beneficiary meeting, this fall.

“I wasn’t sure where the money was going,” Berman said.

“Nothing’s happened to it,” said Susan Tropeano, a board member of the Safe Area for Everyone organization, which formed to advocate on behalf of residents and businesses affected by the blast, and a leading member of the Danversport Trust. “It’s in an account. It still sits there.”

Tropeano and Schlichtmann said any decision by the trust on what to do with the money would probably come following the resolution of the lawsuit against Ashland Chemical.

“That was the will of everyone to wait,” said Schlichtmann, who gained fame when he was played by John Travolta in the movie “A Civil Action,” based on the best-seller chronicling his case representing families against companies that allegedly polluted drinking water in Woburn.

“We haven’t made any decisions,” Tropeano said. “We are waiting to see what happens with the lawsuit.”

More than three years ago, members of the Danversport Trust filed a class-action lawsuit against Kentucky-based Ashland Chemical, alleging in court documents that the company delivered chemicals to the plant the day before the explosion, despite the facility lacking the necessary permits and licenses to store them in such large quantities. Ashland denied playing any role in the explosion, saying state and federal investigations never implicated the company in its findings.

“Hopefully, the lawsuit will further compensate people,” Tropeano said.

Schlichtmann said Ashland is trying to have the case dismissed, but he is arguing that the case should move ahead. Schlichtmann said he may know more by the end of this month and schedule a meeting of the trust in January. He described the case against Ashland as “compelling.”

“This is not how we should be supplying bulk chemicals,” he said.

Not everyone agrees, however.

“I think we should end this thing and move on,” said Bates Street resident Ann Marie Ruotolo.

Ruotolo said that since the blast, many residents who suffered damage have died or moved away.

“I think the lawsuit against Ashland is a lost cause, and I don’t think it’s connected” to the $100,000 left in the trust, said Ruotolo, who received compensation from the initial settlement, though she is not a member of the trust.

With times being tough, it makes sense to distribute the remaining money to the blast victims now, she added.

The $100,000 comes from a $7 million settlement that was funded by insurers for the owners of the plant property. The money was shared among various parties, the Danversport Trust, others who suffered damages, and insurance companies who paid damage claims. These insurers filed lawsuits in the names of those who suffered damage to recoup money they paid in claims, more than $20 million at the time of the settlement. Estimates are that the blast caused $30 million in damage.

This group of insurers received the lion’s share of the settlement, $5,525,000. The trust and others received $1,475,000. It is estimated that residents and businesses that suffered damage, on average, each paid $40,000 in out-of-pocket expenses.

Attorneys fees added up to just under $429,000, leaving a little more than $1 million to be distributed for property damage, physical injury and emotional distress. The average payout was reported to be about $2,700.

The remaining 10 percent of the $1 million, approximately $100,000, was earmarked for the Danversport Trust.

The blast leveled the chemical plant at 126R Water St. that contained ink-maker CAI Inc. and coatings business Arnel Co. Inc. and caused widespread damage to 250 homes and businesses. More than 20 homes and six businesses were destroyed or rebuilt, according to a report by the state fire marshal’s office. Many boats in a nearby marina were also destroyed.

U.S. Chemical Safety Board investigators pegged the probable cause to a plant worker who inadvertently left a steam valve on a mix tank open overnight, causing a volatile mixture of chemicals to boil, fill the plant with flammable vapors, find an ignition source and explode.

Georgetown-based CAI denied federal investigators findings and undertook its own scientific study. The company even sued the gas company in the fall of 2009. However, the U.S. Occupational Safety and Health Administration cited the two companies for serious violations of workplace health and safety standards. Last year, CAI settled with the federal government for $1.3 million, with the money going to the U.S. Environmental Protection Agency to pay for a portion of the cleanup costs.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.