Superior Court Judge Michael Silverstein’s ruling allows Rhode Island’s lawsuit against Curt Schilling and others involved in a $75 million loan guarantee to 38 Studios.
“I am gratified by the Court’s initial ruling in the 38 Studios case,” Rhode Island Governor Lincoln Chafee has said in a statement, in part. “It allows the important claims to proceed and is a significant first step to recovering the taxpayers’ losses.”
In 2010, Rhode Island green-lit a $75 million loan guarantee to 38 Studios, which ended up going bankrupt in 2012 leaving $112 million debts. The lawsuit was filed last November and it claims that 38 Studios management knew the company was headed to bankruptcy but decided not to disclose this information to the Economic Development Corporation board. Silverstein also said that the state cannot sue for the total $75 milllion, because the bonds are being repaid over time so it hasn’t yet lost that full amount. It may be able to claim other costs and future losses though.