Judge to consider joint settlement
PROVIDENCE, R.I. — The Superior Court judge presiding over the legal battle over the $75-million loan to Curt Schilling's 38 Studios video-game company on Sept. 6 will consider the $25.6-million settlement reached Tuesday by the bond-placement agents involved in the failed deal.
Judge Michael A. Silverstein is expected to consider at that time the settlement reached with bond-placement agents Barclays Capital and Wells Fargo Securities as well as any objections to the proposed resolution. Silverstein has approved previous settlements, despite opposition.
The settlements from two of the deal's biggest players came through mediation efforts by retired Superior Court Judge Francis J. Darigan Jr. Both firms deny any wrongdoing in reaching the terms.
Darigan expressed hope during a press conference Tuesday that First Southwest, the state financial adviser at the time of the deal, and a camp of 38 Studios executives would also resolve the case short of trial. "We are very hopeful that [First Southwest] will engage in the process again," he said of mediation.
Patti Doyle, a spokeswoman for First Southwest, said the company has participated in each round of settlement talks. "We respect the confidentiality of those discussions, and it would not be appropriate to comment further as we prepare for trial this fall," Doyle said.
Schilling, who did not respond to an email request for comment Wednesday, commented "Good for them" on Twitter upon learning of the settlement. He has said he looks forward to telling his story in court.
At Governor Raimondo's urging, the Rhode Island State Police agreed Wednesday to waive all fees in The Journal's Access to Public Records request seeking documents related to the years-long investigation into the 38 Studios funding with a $75-million bond deal and eventual collapse.
"The Governor has been clear all along that taxpayers demand and deserve transparency and accountability," Marie Aberger, spokeswoman for the governor, said in an email statement. "Last year, we made tens of thousands of documents available to the public. Governor Raimondo has urged the Attorney General to take action to make all records from this investigation public once the civil process has concluded."
In addition, Aberger emphasized that Raimondo has asked the state police to review the documents related to the investigation to see if any can be released sooner without interfering with the ongoing criminal investigation.
“38 Studios was a bad deal for Rhode Island and I was against it from the start," Raimondo said. "It’s our job to be as aggressive as we can in recovering as much taxpayer money as possible, and [Tuesday's] settlement is another huge step toward that goal. This settlement and the two previous total over $42 million, and we are committed to keep going. Rhode Islanders understandably feel hurt by this deal — and I do too — but I want everyone to know that we are demanding accountability, getting money back, and moving the state forward.”
To date, the law firm Wistow, Sheehan & Loveley, led by Max Wistow, has received $3.6 million in fees and reimbursements for its work representing the Rhode Island Commerce Corporation.
In addition, a second law firm, Schectman Halperin Savage, has received $460,000 as the corporation's general counsel in relation to matters involving the 38 Studios transaction, which includes bankruptcy, receivership, and contract issues, according to Matt Sheaff, corporation spokesman.
The corporation, too, hired an out-of-state firm, Cohen & Dresser, to defend it against U.S. Securities and Exchange Commission charges stemming from the botched loan. That firm has been paid $392,000.