Officials for the state of Rhode Island announced this week that its first settlement payment from its ongoing lawsuit with principles involved in the failed 38 Studios $75 million loan deal has been received. According to a Providence Journal report, the state received a $4.37 million check this week from the insurance company representing two of the 14 defendants in the case. After expenses, the state will be able to bank about $3.2 million.
In late July a Rhode Island judge approved the $4.37 settlement between the state and lawyer Antonio Afonso Jr. (along with his firm, Moses Afonso Ryan). Afonso and his firm were among the 14 defendants named in the EDC’s complaint, which alleges fraud, negligence and breach of fiduciary duty, etc. Alfonso's firm agreed to the settlement but admitted no wrongdoing. They settled because they wanted to put the entire matter behind them.
Moses Afonso worked on the sale of the bonds that financed that deal, which was approved in 2010. Two years later 38 Studios defaulted on the loan and filed for bankruptcy.
The lawsuit against other defendants – including former Red Sox Pitcher and 38 Studios founder Curt Schilling, former EDC executives, bankers involved in the deal, and others – continues.