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Rhode Island General Assembly proposes bill to encourage settlement in 38 Studios lawsuit

Thursday, 9th January 2014 21:20 GMT By Stephany Nunneley

The Rhode Island General Assembly introduced a bill on Wednesday, January 8 which would resolve the $75 million debut incurred through a loan given to 38 Studios.

The bill was submitted “at the request” of Governor Lincoln Chafee’s administration, and covers “court-approved settlements” stating: “a person, corporation, or other entity who has resolved its liability to the Rhode Island Commerce Corporation in a judicially approved good faith settlement is not liable for claims for contribution or equitable indemnity regarding matters addressed in the settlement.”

According to GamePolitics per the Providence Journal, the bill defines a “good faith settlement” which doesn’t “exhibit collusion, fraud, dishonesty, or other wrongful or tortious conduct intended to prejudice the non- settling tortfeasor(s), irrespective of the settling or non-settling tortfeasors’ proportionate share of liability.”

Similar proposals were used by the state’s Senate during similar settlements in the 1990s and over the Station Nightclub fire in 2003.

“The bill is specific only to the 38 Studios lawsuit and is done to encourage a settlement,” said House Judiciary Chairwoman Edith Ajello (D-Providence), in a statement. “The bill makes it clear that the credit to the non-settling defendants is limited to the amount of money paid by the settling defendants. It eliminates the uncertainty of determining what the percentage of fault is among all the defendants, which may not be determined for many years in the event of a jury trial.”

In September, the US Securities and Exchange Commission (SEC) began an investigation into the $75 million loan handed to 38 Studios by the state of Rhode Island’s Economic Development Corporation (EDC), which as of January 1 was renamed the Rhode Island Commerce Corporation (RICC).

Last week, it was revealed the SEC subpoenaed the RICC for more information pertaining to the investment and the ongoing lawsuit during December.

The whole matter has been drawn out since 2012, so if you missed anything pertaining to the against 38 Studios lawsuit, be sure to look over our hub.

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3 Comments

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  1. SplatteredHouse

    This seems to me an odd story for vg247 to run, since it deals in minutiae of the RI/38s proceedings. The proposal (unless I’ve read the source wrong) states that one that settles – but didn’t they already fold; how are they extracting 75$m to “settle”? – can’t be claimed against by a non-settler…

    “not liable for claims for contribution”

    WTB: Layman’s version!

    #1 7 months ago
  2. Stephany Nunneley

    @2 Just keeping everything pertaining to the 38 Studios thing up-to-date is all. The whole thing is: the state is not on the hook for the loan unless it feels it has a “moral” obligation to pay. The insurance held by the bond holders will cover any perceived loss. In other words, the state is not liable but Chaffee has said he will pay it anyway so as not to lower the “credit rating” of the Rhode Island.

    In other words: he helped ruin a studio (not caused but “helped” imo) and now he is determined to pay back a $75 million load he could have given a studio more time on. That’s what I get from it anyway. It’s all a bit of a mess.

    #2 7 months ago
  3. SplatteredHouse

    Thanks for trying to clear up what the real implication of what the proposed events in your story amounts to. I can only speak for my own level of interest, but it is often that which is of most importance. :)

    My “complaint” (more like, reason for previously wondering why the story is posted here) such as it is, is simply that it struck me on reading as the kind of thing that would feature on an RSS of a dedicated follower of the case. Not as much for the more casual onlooker?

    #3 7 months ago