RI sues Schilling over 38 Studios loan guarantee
Published 8:44 am Friday, November 2, 2012
PROVIDENCE, R.I. — Rhode Island’s economic development agency on Thursday sued former Red Sox pitcher Curt Schilling and some of its former officials in connection with a $75 million loan guarantee to his failed video game company.
The suit was filed in Rhode Island Superior Court four months after 38 Studios filed for bankruptcy after a spectacular collapse. The board of the Economic Development Corp. in 2010 lured 38 Studios to Providence from Massachusetts with the loan guarantee.
In addition to Schilling, who founded the company, the suit names former EDC Executive Director Keith Stokes; Michael Saul, a former top official with the EDC who worked closely on the deal; and two law firms that also worked with the agency. It also names several other former 38 Studios officials.
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Gov. Lincoln Chafee said the EDC board authorized the legal action in an attempt to recoup some of the state’s money.
“My message to Rhode Islanders is this: I know that you work hard for your paychecks, and for your tax dollars to be squandered is unacceptable,” Chafee said in a video statement. “The Board’s legal action was taken to rectify a grave injustice put upon the people of Rhode Island.”
Chafee said in the message he would not comment further and that the filing of the complaint is “only the beginning.”
EDC spokeswoman Judy Chong said the agency has no comment. Messages left for Schilling, Stokes and Saul weren’t immediately returned.
With 38 Studios’ collapse into bankruptcy in June, Rhode Island is likely on the hook for more than $100 million, when interest is factored in on the bonds the state issued on the company’s behalf.
The EDC in June hired an outside firm to determine whether