Foam Company Settles Club Fire Claims

By Shannon Henson (June 27, 2008, 12:00 AM EDT) -- American Foam Corporation has agreed to pay $6.3 million to settle lawsuits filed by the families of the 100 people killed in a nightclub fire in Rhode Island in the latest in a string of settlements relating to the fire.

The deal, filed Thursday in the U.S. District Court for the District of Rhode Island, also settles allegations against the company's former president, Aram DerManouelian, who is now deceased, and Barry Warner, a company salesman.

American Foam allegedly sold the club its foam, which experts say is highly flammable and shouldn't be used as acoustic insulation.

The settlement must still be...

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