Deal would bring total settlements so far to approximately $45 million in ongoing 38 Studios litigation
Commerce Corporation remains engaged in litigation against First Southwest Company
The Rhode Island Commerce Corporation announced today it has agreed to a $2.5 million proposed settlement with Curt Schilling, Thomas Zaccagnino, Richard Wester, Jennifer MacLean, and their insurer, Starr Indemnity and Liability Company, in the 38 Studios litigation. The settlement was filed in Rhode Island Superior Court today and is contingent upon court approval. If the Court approves the settlement, the Corporation will have obtained settlements totaling approximately $45 million in the ongoing 38 Studios litigation, over half of the roughly $88 million state moral obligation on 38 Studios bonds for both past and future appropriations.
The settlement is a product of a court-ordered mediation conducted by retired Superior Court Justice Francis J. Darigan, Jr. and the efforts of our counsel in the 38 Studios Litigation, Max Wistow, Stephen Sheehan, and Benjamin Ledsham. Judge Darigan will brief members of the media today at 11:00 a.m. in Courtroom 12 at Providence Superior Court.
The law firm of Shechtman Halperin Savage, LLP, which serves as general counsel to the Corporation, determined that the recoverable assets on any judgment entered against the defendants in the litigation, including any remaining insurance coverage, would be expected to be less than $2,500,000. The firm reached this conclusion after a comprehensive and detailed analysis of the assets of the individual defendants. Accordingly, the proposed settlement is more than the Corporation can reasonably expect to recover even if the Corporation prevails against these defendants at trial, and has the additional advantage of certainty.
The Corporation previously settled claims against Wells Fargo Securities, LLC and Barclays Capital Inc. for $25.625 million in August 2016, Antonio Afonso, Jr. and Moses Afonso Ryan Ltd. for $4.4 million in June 2014, and Adler, Pollock & Sheehan P.C., Robert I. Stolzman, J. Michael Saul, and Keith W. Stokes for $12.5 million in August 2015.
The Corporation is still engaged in litigation against First Southwest Company. That litigation will go forward in order to further reduce the taxpayers' potential exposure on the remaining moral obligation.