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Judge denies request to end 38 Studios loan adviser questioning

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A Rhode Island judge denied a request that would have prevented further questioning of a financial adviser involved in the state's $75 million loan guarantee to 38 Studios, The Providence Journal reports.

R.I. Superior Court Judge Michael A. Silverstein denied the request from First Southwest, a financial advisory firm. Maureen Gurghigian, a senior vice president at its Lincoln, R.I. office, has undergone questioning twice in the ongoing lawsuit that the state filed in November 2012 against members of 38 Studios and the Rhode Island Commerce Corporation (formerly known as the Rhode Island Economic Development Corporation). Lawyers representing the RICC are expected to continue her questioning, though Silverstein capped it at a one-day, six-hour-long session.

In 2010, Rhode Island backed the loan guarantee, which was designed to bring the developer and 450 jobs to the state. However, Red Sox pitcher Curt Schilling's development studio declared bankruptcy in June 2012. Later that year, the state filed suit and maintains that those involved in the loan guarantee's approval did not fully disclose the associated risks. Just last week, Rhode Island state Senator James Sheehan requested copies of "all depositions and exhibits" related to the case, which he believes "will help answer many questions still left unanswered about how the ill-fated deal came about."

In February, the Rhode Island House of Representatives passed a bill to encourage settlements in the ongoing legislation. In January, the state Senate unanimously passed the bill.