Rhode Island Proposes 38 Studios Law for Settlements

Rhode Island Proposes 38 Studios Law for Settlements

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Rhode Island has proposed a new law which it hopes will encourage settlements in the 38 Studios bankruptcy lawsuit.

In its ongoing effort to clean up the 38 Studios mess, Rhode Island has proposed new legislation that it hopes will encourage defendants in the lawsuit filed over the studio's bankruptcy to enter into a settlement. The new law would apply exclusively to "The Rhode Island Economic Development Corporation Job Creation Guaranty Program Taxable Revenue Bond (38 Studios, LLC Project) Series 2010," more colloquially known as "that 75 million we gave to Curt Schilling."

The proposal states that "a person or entity who resolved its liability to the Rhode Island commerce corporation as it relates to the issuance by the Rhode Island economic development corporation of seventy-five million dollars ($75,000,000) in revenue bonds... in a judicially approved good faith settlement would not be liable for claims for contribution or equitable indemnity to other potential joint tortfeasors, in regard to matters addressed in such good faith settlement."

I'm not a lawyer and there are some awfully big words in there, but to my understanding it essentially means that anyone who enters into an approved settlement cannot later be held liable for any future claim. Rhode Island has used similar legislation twice previously, once in the wake of a banking crisis in the 1990s and then again following the 2003 Station Nightclub fire, in which 100 people died.

"The legislation encourages settlement," Senate Judiciary Committee Chairman Michael McCaffrey said in a statement. "It provides that those defendants entering good faith, judicially-approved settlements would not be liable for claims from co-defendants for contribution or equitable indemnity regarding matters addressed in the settlements. The finality of the litigation without fear of a contribution claim from a co-defendant provides an inducement to settle."

38 Studios was founded in 2006 by former Boston Red Sox ace Curt Schilling and moved to Rhode Island in 2010, drawn to the state by a $75 million loan guarantee. But less than two years later the studio collapsed, leaving the state on the hook for the money. The government of Rhode Island sued Schilling and other former executives in November 2012.

The proposed legislation can be read in full here.

Source: Providence Journal

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Translated for the rest of use(at least I think)

"An individual or group who decided to give it's 'legal' responsibility to Rhode Island's (Commerce Corperation), in relation to
the loan we gave to 38 Studios.... in a legaly approved judgement on our end toward the settlement(lawsuit), is not legally responsible for claims for payment, or protection from others who may have helped cause the issue, such as the settlement(lawsuit) we just mentioned"

Not quite sure what it means(in the grand scheme of things). Is there a law major out there?

"The legislation encourages settlement," ...."It provides that those defendants entering good faith, judicially-approved settlements would not be liable for claims from co-defendants for contribution or equitable indemnity regarding matters addressed in the settlements. The finality of the litigation without fear of a contribution claim from a co-defendant provides an inducement to settle."

So...it protects and keeps any settlement claims Rhode Islands gets from effecting those within their 'program', and it speeds up the process essentially voiding them from a group verdict by making them more willing to comply? So do they receive a different verdict, or are they just exempt for any claims should they settle?

Crimsonmonkeywar:
Translated for the rest of use(at least I think)

"An individual or group who decided to give it's 'legal' responsibility to Rhode Island's (Commerce Corperation), in relation to
the loan we gave to 38 Studios.... in a legaly approved judgement on our end toward the settlement(lawsuit), is not legally responsible for claims for payment, or protection from others who may have helped cause the issue, such as the settlement(lawsuit) we just mentioned"

Not quite sure what it means(in the grand scheme of things). Is there a law major out there?

I'm not law, but I believe it seems to be a 'covering our own ass' policy.

Ya, from what I get get their essentially looking to end the lawsuit with a settlement. Which is strange because they were out for blood when they started. The only reason I can assume why they would is that they received some damning intel that either the don't have a case, it's going to turn fruitless, or their approval rating is tanking do to their 'seeming' ineptitude.

I any case it seems we may just have to stick with speculation. It would've probably been for the best is Chafee chose to keep his mouth closed, and if what Schilling said was correct(and I take it with a grain of salt) that Chafee was informed of their efforts to find an investor(and potentially close a deal), then I've nothing else to say but, I hope it was worth it.

If Schilling was ruined by the new mayor opening his big mouth then I hope he fights and sues Rhode island for damages caused by the selfish moron. Good luck to him I say.

I thought you couldn't introduce laws to deal with situations that have already happened. 38 Studios had a contract with Rhode Island that went bad, As far as I understand it, Rhode Island can't change the contract now by making incredibly specific laws on a situation that has already happened.

RicoADF:
If Schilling was ruined by the new mayor opening his big mouth then I hope he fights and sues Rhode island for damages caused by the selfish moron. Good luck to him I say.

If only it were that cut-and-dry. The mayor should have kept his mouth shut, granted, but Schilling's spending was WAY out of control. The collapse was pretty much going to happen regardless of what the mayor had done.

WhiteTigerShiro:

RicoADF:
If Schilling was ruined by the new mayor opening his big mouth then I hope he fights and sues Rhode island for damages caused by the selfish moron. Good luck to him I say.

If only it were that cut-and-dry. The mayor should have kept his mouth shut, granted, but Schilling's spending was WAY out of control. The collapse was pretty much going to happen regardless of what the mayor had done.

Well not necessarily, even if the game went bust, had they found an investor, 38 Studios would probably still be in business(though downsized). The laid off staff would have had far more time to find new jobs, and the people of Rhode Island would have been left with far less debt on the table, and add the fact the more business would be interested in setting up shop in the state, it was an ill-conceived move. In the end whats done is done. Regardless of whether or not he did it in spite, loans went unpaid and people with families (future, taxable, residents) were out of a job.

Crimsonmonkeywar:
Well not necessarily, even if the game went bust, had they found an investor, 38 Studios would probably still be in business(though downsized). The laid off staff would have had far more time to find new jobs, and the people of Rhode Island would have been left with far less debt on the table, and add the fact the more business would be interested in setting up shop in the state, it was an ill-conceived move. In the end whats done is done. Regardless of whether or not he did it in spite, loans went unpaid and people with families (future, taxable, residents) were out of a job.

For a really good read look over at Boston Magazine, http://www.bostonmagazine.com/2012/07/38-studios-end-game/, they have a pretty good story about the whole affair.

What it came down to is Curt drastically overestimated his own abilities and tried to make the next World of Warcraft with a team that didn't have the experience and resources to pull it off nor did he listen to his leadership team. The article had a good analogy, like making a movie instead of making something easy to get money flow like Evil Dead he was trying to make Avatar from the start.

For their part Rhode Island saddled 38 Studios with absolutely ridiculous requirements like forcing them to hit hiring goals to get the money so 38 studios scaled up way too fast and put them under some pretty crushing payroll. Rhode Island was gambling with taxpayer's money on a business that wasn't proven to even have a chance.

There was blame to go around to everybody.

Nice find, will differently read through.

 

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