EDC Attorney: We Have Had Settlement Talks in 38 Studios Lawsuit

Max Wistow, the attorney representing the Rhode Island Commerce Corp. (formerly known as the Rhode Island Economic Development Corp.) said that he has had settlement talks in the case against 38 Studios. He says that the Rhode Island General Assembly should pass a new bill announced last week that encourages out-of-court resolutions.

"There's been enough discussion to make it clearly worthwhile to have the legislation passed," he said.

Wistow would not discuss who specifically he might have been talking to about a settlement.

The Rhode Island EDC approved a $75 million loan guarantee for former Curt Schilling's startup in 2010. That deal went south in 2012 when the studio was forced to close its doors and file for bankruptcy. The agency later sued the former Red Sox pitcher and 13 others involved in the deal after the company went bankrupt last year. The EDC claims in its lawsuit that its board was misled into signing off on the deal.

The legislation in question is designed to encourage possible settlements and was introduced this month in the General Assembly at the behest of Gov. Lincoln Chafee. The bill would apply only to the 38 Studios case, would shield any party that settles with the EDC from a lawsuit filed by a co-defendant over damages that co-defendant is ultimately found liable for.

In addition to Curt Schilling, defendants in the case include former EDC Executive Director Keith Stokes and Deputy Director Michael Saul; officials at 38 Studios; two law firms that worked with the EDC; a financial adviser for the state; and Wells Fargo Securities and Barclays Capital, investment banks hired by the EDC to assist in issuing bonds for the deal.

The lawsuit seeks repayment of the $75 million in bonds (and associated debt) and triple damages.

Source: Tribtown

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