Insurers paid victims' families $262 million in Everglades crash

MIAMI - The families of 110 people killed in the 1996 ValuJet crash in the Everglades have received at least $262 million in insurance settlements, court records show.

The settlement amounts - normally shielded by confidentiality agreements - became public when prosecutors sought repayment from SabreTech, the jet repair company convicted of mishandling hazardous cargo it delivered to the plane.

The illegal shipment of explosive-tipped oxygen generators caused the cargo fire that brought down the Atlanta-bound DC-9 shortly after takeoff from Miami International Airport on May 11, 1996.

The National Transportation Safety Board split the blame among SabreTech, ValuJet and the Federal Aviation Administration for lax oversight of the fast-growing discount carrier now operating as American Trans Air Inc.

SabreTech, the first aviation company criminally convicted in a commercial crash, is to be sentenced Aug. 13. Along with restitution, prosecutors are seeking a $4.5 million fine and five years probation. The company is no longer in business.

The documents, filed earlier this month, show that Lloyd's of London, which insured SabreTech, has paid $151 million and United States Aviation Underwriters of New York, ValuJet's insurer, has paid $111 million to settle all but two of the claims from relatives of people killed in the DC-9 crash. Payments averaged $2.4 million.

U.S. Magistrate Judge Stephen Brown recommended that the trial judge discard insurance reimbursement and winnow other restitution to $9.1 million, primarily to cover lost income for three families.

''We're pleased that the magistrate adhered closely to the law in ruling out the bulk of all of these claims,'' Ken Quinn, corporate counsel for SabreTech, said Wednesday.