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Insurance Companies Reach Tentative Agreement On Fire Victims’ Claims

November 6, 1992

CHARLOTTE, N.C. (AP) _ Three insurance companies have tentatively agreed to pay $16.1 million to settle claims by victims of the chicken processing plant fire that killed 25 people last year.

After more than a year of negotiations, the trustee handling the bankruptcy of Imperial Food Products Inc. promised in court Thursday to recommend payments to 101 of the 102 families who filed claims for dead, injured and emotionally disturbed workers.

Bankruptcy Court Judge James Wolfe Jr. still has to approve the deal, if anyone involved objects.

The Sept. 3, 1991, fire at the plant in the town of Hamlet killed 25 and injured 56 in one of North Carolina’s worst industrial accidents. A medical examiner ruled that illegally locked and blocked doors contributed to most of the deaths.

Plant owner Emmett Roe pleaded guilty this fall to 25 counts of involuntary manslaughter and was sentenced to 19 years and 11 months in prison.

The $16.1 million settlement is the maximum coverage held by Imperial Food. The coverage was held by American International Group, Liberty Mutual Insurance Co., and U.S. Fire Insurance Co., which put up $15 million of the settlement.

North Carolina law says workers can sue if an employer permits conditions ″substantially certain″ to injure workers. The insurance companies initially argued the plant’s safety violations were so bad that the company - not the insurers - should pay the victims, said sources familiar with the talks.

The money will be divided according to several factors, including the severity of injuries among those who survived, said Raleigh attorney Jay Trehy, a negotiator for the victims and their families.

″We hope to have money in the hands of the victims by Christmas,″ Trehy said.

″It will help a lot. We need bills paid,″ said Ada Blanchard of Hamlet, who suffered from smoke inhalation and has lingering health problems. She said she doesn’t know how much she would get, but owes more than $2,000 in medical bills.

Lawyers for the families also have begun to file claims against the U.S. Department of Agriculture. A USDA inspector had approved locking a fire door at the plant.

Attorneys for the families said they also might file claims against companies that made, sold or serviced the plant’s equipment.

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