The state Department of Military and Veterans Affairs agreed to pay $250,000 to settle a negligence and wrongful-death lawsuit filed by the family of a retired Philadelphia police officer who froze to death after wandering from a state veterans home in Northeast Philadelphia.

Settlement papers released Friday show that most of the money will go to the estate of Harold C. Chapman Jr. and his two daughters.

Chapman, 75, who suffered from dementia and Alzheimer's disease, wandered away from the Delaware Valley Veterans Home, on Southampton Road, at 5:30 p.m. on Dec. 31, 2007. Court records show that a surveillance camera recorded Chapman walking unnoticed past a security desk, wearing pajamas.

Ezra Wohlgelernter, the Chapman family lawyer, did not respond to a request for comment. Nor did officials of Military and Veterans Affairs.

A state Health Department inspection report cited the home for failing to take timely action, "resulting in actual harm and death to the resident."

Records show that several staffers were reprimanded or suspended. One aide quit rather than undergo questioning, and state officials later learned that he previously was convicted of stalking.

One of six state-operated nursing homes for veterans, the 130-bed Delaware Valley Veterans Home implemented procedures to prevent a recurrence, according to agency officials.

In the lawsuit, Chapman's daughters charged that workers at the home were negligent and distracted because of plans for a New Year's party.

The temperature that night fell below freezing, and an icy rain blanketed the Philadelphia area.

No one noticed Chapman's absence for two hours, even though employees were supposed to monitor him, an internal investigation found. His body was discovered the next morning. An autopsy listed hypothermia as the cause of death.

In an interview last year with the Pittsburgh Tribune-Review, his widow said that the body lay only a few hundred yards from the home.

"If he were any closer, they would have tripped over him," Barbara Chapman said.

A Korean War veteran, Chapman suffered permanent injuries while serving as a police officer.

The settlement agreement grants Chapman's daughters, Cheryl Pieretti and Laura Cerminara, $30,128 apiece. A total of $90,385 will go to Chapman's estate. The law firm of Feldman Shephard will be paid $83,333 for fees and $16,023 for expenses.

Common Pleas Judge Joseph D. O'Keefe approved the settlement.