$6.6m settlement offered in Danvers blast

Homes and businesses in the Water Street area in Danvers were destroyed in the Nov. 22, 2006 paint factory blast. (David L. Ryan/Globe Staff/2006 File)

DANVERS - A settlement of $6.6 million has been proposed to resolve a class-action lawsuit against the owners of a Danvers paint factory that exploded almost two years ago, nearly wiping out a waterfront neighborhood.

CAI Inc. of Georgetown and Arnel Co. of Danvers - which co-owned the factory that exploded into a fireball on Nov. 22, 2006 - would pay $1.4 million to about 100 property owners and $5.2 million to insurance carriers, according to a settlement proposal filed yesterday in Lawrence Superior Court.

The $6.6 million represents the entire amount of liability insurance carried by each company, according to the court filing. The settlement would "not be an admission of liability" by either company, court papers show. Insurance carriers have paid out in excess of $20 million to settle claims filed by homeowners, businesses, and boat owners, according to the filing.

W. Paul Needham, a lawyer for the companies, did not return a call seeking comment.

Federal and state investigators concluded that the explosion was caused when chemical vapors that had built up inside the factory ignited from an unknown source.

Jan Schlichtmann, a Beverly environmental lawyer who represented the plaintiffs, said yesterday, "The settlement would be for the benefit of anyone who was impacted by the explosion." The settlement must also be approved by the court, he added.

The settlement also would apply to 215 members of The Danversport Trust, which formed last year to negotiate an out-of-court settlement.

Members of the trust will meet Tuesday to vote on whether to accept the offer. A three-person panel would decide how much each individual receives in compensation, if the agreement is approved.

"Everybody's circumstances are different," said Susan Tropeano, a resident who helped to organize the trust. "We really think this [settlement] is the best way to do it."

Kathy McCabe can be reached at kmccabe@globe.com.

Correction: Because of an editing error, a story in Saturday's City & Region section on a proposed settlement to resolve a class-action lawsuit against the owners of a Danvers paint factory that exploded in 2006 gave an incorrect amount of total insurance available. The total amount of liability insurance available from the companies, CAI Inc. and Arnel Co., is $7 million.