Rhode Island's first 38 Studios settlement could gross $4.37M

The Rhode Island Commerce Corporation could earn $4.37 million from a proposed settlement between the RICC, Antonio Afonso, Jr. and the firm Moses Afonso Ryan Ltd. relating to the state's failed $75 million loan guarantee to video game developer 38 Studios.

Governor Lincoln Chaffee announced late last week that the settlement, which would be the state's first in the case, was filed in Rhode Island Superior Court and is awaiting the Court's approval. Moses Afonso Ryan was involved in the initial $75 million loan guarantee's approval.

The settlement would provide the RICC (formerly known as the Rhode Island Economic Development Corporation) a $4.37 million payment, the full amount of the defendants' insurance coverage minus $200,000 earmarked to pay individual defendants' legal fees and $430,000 in defense costs. The original insurance policy was limited to $5 million.

According to The Associated Press, a hearing on the matter is scheduled for 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," Governor Chafee said.

In the proposed settlement, the defendants do not acknowledge liability of wrongdoing and maintain their position that they have committed no wrongdoing.
"The settlement agreement states that the RICC and the settling defendants are mindful of the inherent uncertainty of litigation, and the financial costs associated with the ongoing prosecution and/or defense of same," the Governor's statement reads.

The RICC backed a $75 million loan guarantee for 38 Studios in 2010, but the Kingdoms of Amalur: Reckoning developer declared bankruptcy in 2012. The state filed suit against members of 38 Studios and the RICC in late 2012, claiming that it was not fully made aware of the loan guarantee's risks. Since the studio's bankruptcy, lawmakers have debated the merits of repaying or defaulting on the debt incurred.

You can follow along with the continuing developments between former members of 38 Studios, the RICC and Rhode Island in Polygon's StoryStream.

Source: Polygon
 

Rhode Island pursues 38 Studios figures on lobbying law grounds

38 Studios founder Curt Schilling, plus a board member of the defunct studio and and two others have been ordered to appear before a hearing in Rhode Island to determine if they violated that state's laws by lobbying for a $75 million state loan without registering with the state as lobbyists.

The development is the latest in the ongoing cleanup of 38 Studios' 2012 collapse. Schilling's studio set up shop in Rhode Island to get a $75 million loan guaranteed by the state, and with the money developed Kingdoms of Amalur: Reckoning and started work on an MMO based on the Amalur canon.

But when Reckoning came nowhere near selling enough to keep the operation afloat, it folded, and the involvement of state funds in 38 Studios' activities has led to numerous legislative inquiries since.

Schilling, an all-star pitcher in a 19-year Major League Baseball career, has gone through personal bankruptcy in the aftermath. He, along with attorney Michael Corso, 38 Studios board member Thomas Zaccagnino, and Keith Stokes, the former executive director of the Rhode Island Economic Development Corporation, have been ordered to retroactively register themselves as lobbyists with the state and appear at a Tuesday hearing.

The four had not registered as lobbyists with the Rhode Island secretary of state in 2010, when the loan was secured. "It is our goal to uncover any lobbying violations, which may have occurred without our knowledge, which is why our office has sent letters of inquiry to all parties who we feel may have been involved in lobbying activity, and may be in violation of lobbying laws," wrote Rhode Island Secretary of State Ralph Mollis.

Rhode Island has recently debated willfully defaulting on the $89 million debt it guaranteed on 38 Studios' behalf, but the state ultimately approved paying $12.3 million for the next installment on the loan.

Source: Polygon