The Rhode Island Commerce Corporation could earn $4.37 million from a proposed settlement between the RICC, Antonio Afonso, Jr. and the firm Moses Afonso Ryan Ltd. relating to the state's failed $75 million loan guarantee to video game developer 38 Studios.
Governor Lincoln Chaffee announced late last week that the settlement, which would be the state's first in the case, was filed in Rhode Island Superior Court and is awaiting the Court's approval. Moses Afonso Ryan was involved in the initial $75 million loan guarantee's approval.
The settlement would provide the RICC (formerly known as the Rhode Island Economic Development Corporation) a $4.37 million payment, the full amount of the defendants' insurance coverage minus $200,000 earmarked to pay individual defendants' legal fees and $430,000 in defense costs. The original insurance policy was limited to $5 million.
According to The Associated Press, a hearing on the matter is scheduled for July 7.
"The proposed settlement is a step in the right direction, and I hope this is the beginning of a positive resolution to the 38 Studios saga," Governor Chafee said.
In the proposed settlement, the defendants do not acknowledge liability of wrongdoing and maintain their position that they have committed no wrongdoing.
"The settlement agreement states that the RICC and the settling defendants are mindful of the inherent uncertainty of litigation, and the financial costs associated with the ongoing prosecution and/or defense of same," the Governor's statement reads.
The RICC backed a $75 million loan guarantee for 38 Studios in 2010, but the Kingdoms of Amalur: Reckoning developer declared bankruptcy in 2012. The state filed suit against members of 38 Studios and the RICC in late 2012, claiming that it was not fully made aware of the loan guarantee's risks. Since the studio's bankruptcy, lawmakers have debated the merits of repaying or defaulting on the debt incurred.
You can follow along with the continuing developments between former members of 38 Studios, the RICC and Rhode Island in Polygon's StoryStream.