PROVIDENCE, R.I. -- A Rhode Island Superior Court judge's ruling issued moments ago in the state's lawsuit against the people involved in the 38 Studios deal leaves open the possibility for Rhode Island taxpayers to recover some of the money tied up in the loan to the ill-fated videogame company.
Ex-Red Sox ballplayer Curt Schilling in 2011 brought the Massachusetts videogame company he founded to Providence as the result of a $75-million loan deal backed with bonds issued by the R.I. Economic Development Corp. The company folded in 2012, leaving Rhode Island taxpayers potentially owing bondholders approximately $100 million in principal and interest.
In November 2012, the EDC filed a lawsuit in Superior Court against Schilling, three other 38 Studios executives, two of the agency's former employees and others in the hopes of avoiding those payments.
Schilling and the 13 other defendants promptly sought to have the case dismissed.
The 98-page ruling issued Tuesday morning by Judge Michael A. Silverstein, dismisses some charges against some of those defendants, but leaves the EDC with the possibility of recovering money in the case.
"The EDC annot recover for (1) a $75 million loss from the Defendants because it did not lose $75 million in the transaction," Silverstein writes in his conclusion. But, the judge goes on to write "The EDC may recover for (1) its liability for the General Assembly's appropriation of funds."
The latter point is a reference to the new state budget, in which legislators included $2.5 million to begin paying bondholders the money they are due. They may have to include $12.5 million annually in the budget for several years to pay the bonds.
"We are very pleased with the decision," said Max Wistow, the EDC's lawyer. "The judge is saying the EDC does have standing to collect that [money]. It enables us to go forward and to proceed to what we feel will be a favorable conclusion for the state.
The judge dismissed some charges against companies involved in the loan deal.