Assembly urged to pass 38 Studios settlement bill
PROVIDENCE, R.I. (AP) — The lawyer for the Rhode Island economic development agency that is suing Curt Schilling over its failed investment in his video game company said Thursday that passing proposed legislation encouraging out-of-court settlements will help maximize any potential financial recovery.
Attorney Max Wistow told a Senate panel that resources that could be recovered in the 38 Studios lawsuit are “being eaten up very rapidly.” He said 11 of the defendants in the case have so-called cannibalizing insurance policies that pay defense costs out of the policy limits.
“The resources to recover in the lawsuit are every day diminishing,” he said.
The former Economic Development Corp., now known as the Commerce Corp., sued the ex-Red Sox pitcher and 13 others after 38 Studios went bankrupt in 2012. The EDC board approved a $75 million loan guarantee for the company in 2010 as a way to lure it to Providence from Massachusetts.
The state now is on the hook for some $90 million related to the transaction.
The bill under consideration in the General Assembly would shield any party that settles with the state from a lawsuit filed by a co-defendant over damages that co-defendant is found liable for.
Wistow said previously he has had confidential settlement talks in the case, but declined to say with which defendants. He told lawmakers Thursday that some of the defendants are “very eager” to see the legislation passed.
The lawsuit claims the EDC board was misled into approving the deal. Schilling and the other defendants deny the charges. His lawyer said recently she intends to litigate the case “to the fullest.”
The committee forwarded the bill to the full Senate after a unanimous vote.