updated 11/24/2010 3:51:21 PM ET 2010-11-24T20:51:21

The family of five children injured in a Northern California carnival ride collapse reached a settlement of nearly $3.4 million with ride owners and the manufacturer, a newspaper reported Wednesday.

Robert and Deena Milligan settled with Brass Ring Amusements, Chance Rides Manufacturing and North American Amusements over the May 2008 accident, The Record of Stockton said.

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Lawyers for the Milligans said one of the children suffered permanent brain damage and orthopedic injuries in the accident. Plaintiff lawyers will receive more than $1 million of the settlement, approved by a judge Tuesday.

The collapse of the Yo-Yo chair ride at the Calaveras County Fair injured a total of 21 children when the metal arms of the spinning ride collapsed, dragging riders across the ground before coming to a halt.

California regulators found last year that the ride was not properly maintained.

The California Department of Industrial Relations issued a report saying a damaged washer failed to hold a pair of nuts in place, causing the arms to crash.

Chance Rides issued a bulletin five months after the accident ordering Yo-Yo ride owners to install a metal plate to prevent the washer from failing.

Organizers of the fair, best known for its Jumping Frog Jubilee, said the collapse was the first serious accident in its 80-year history of the event.

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