Rhode Island Superior Court judge Michael A. Silverstein listened to arguments today on a proposed settlement by two of the defendants in the state’s lawsuit against 14 individuals involved in the failed 38 Studios loan deal. The judge did not issue a ruling on the matter.
He also pushed a hearing on the constitutionality of a state law allowing individual settlements to be made to next week. Former RI EDC executive director Keith Stokes and deputy director J. Michael Saul have asked the judge to rule the law – which was passed earlier this year – unconstitutional. That matter will be taken up again next Monday.
The draft settlement with Moses Afonso Ryan Ltd., a law firm that was bond counsel in the 38 Studios deal, as well as Antonio Afonso Jr., one the firm’s partners, calls for a settlement of $4.4 million. The payment would be made by the firm's insurance company, Liberty Insurance Underwriters Inc.
David Grossbaun, a lawyer for Moses Afonso Ryan, said his clients still "wholeheartedly deny" the claims made by the state, but argued that if they continued to fight the suit, there will be “little or nothing” left of the firm’s $5-million insurance policy.
"It’s all about the numbers," Grossbaun said.
Max Wistow, a lawyer representing the state, encouraged Silverstein to approve the deal, arguing that settlements are "good public policy."
We'll have more on this story as it develops.