The state of Rhode Island has settled with one of the law firms it sued as part of the lawsuit against 38 Studios and other principles for a failed $75 million loan deal. The law firm, Moses Afonso Ryan, has admitted no wrong-doing, but has agreed to pay $4.4 million to the state because it wants to put the matter behind them. The settlement agreement was filed with Superior Court Judge Michael Silverstein on Friday. A hearing on the matter will take place July 7.
"The proposed settlement is a step in the right direction, and I hope this is the beginning of a positive resolution to the 38 Studios saga," Gov. Lincoln Chafee said in a written statement.
The law firm said in the filing that it continues to deny any liability but wants to put the matter behind it, as well as avoid the risk of a larger judgment at trial.
The lawsuit alleges that two former agency employees of the Rhode Island EDC, investment banks, executives and board members at 38 Studios, and others misled the state into approving the loan guarantee. An attorney with the firm – Moses Afonso – worked on the bond sale and was accused of breach of fiduciary duty, fraud, malpractice, negligence and other wrongdoing.