14 DAY TRIAL // Out-of-court settlement discussions are being encouraged in the 38 Studios failed investments case, pursued by the state of Rhode Island.
Rhode Island Commerce Corporation lawyer Max Wistow revealed he had been involved in some general discussions regarding settlements in the 38 Studios case, and was at the moment pushing for an out-of-court resolution, as reported by Boston.com.
The Economic Development Corp., renamed the Rhode island Commerce Corp., issued a $75 / €55 million loan guarantee for Curt Schilling's video game company in 2010. After the company went bankrupt last year, it sued the former baseball star along with 13 others, on claims that the EDC board was misled during the transaction.
Apart from 38 Studios officials, former EDC directors Michael Saul and Keith Stokes, two law firms working with the EDC at the time, a state financial adviser and the Wells Fargo Securities and Barclays Capital investment banks are also being sued in the 38 Studios case.
Earlier this month, legislation encouraging possible settlements outside a court of law was introduced in the General Assembly by Governor Lincoln Chafee and his administration, a bill that would prevent parties settling with the EDC from being sued by co-defendants for damages they are themselves found liable for.
The new bill might be applicable to the 38 Studios case, and Wistow stated that “there's been enough discussion to make it clearly worthwhile to have the legislation passed.”
“I submitted this legislation at the request of the governor to encourage settlements in the 38 Studios litigation,” said judiciary chairman Michael McCaffrey, the bill's Senate sponsor.
This particular legal strategy has been successful in two other high-profile cases in Rhode Island, Governor Chafee's spokeswoman said that the governor was only “interested in recapturing the money the state is on the line for.”