The Rhode Island Commerce Corporation announced Tuesday that it has agreed to a $25.625 million proposed settlement with Wells Fargo Securities, LLC & Barclays Capital Inc. in the 38 Studios litigation. The settlement was filed in Rhode Island Superior Court Tuesday and is contingent upon court approval.
“38 Studios was a bad deal for Rhode Island and I was against it from the start,” Governor Gina Raimondo said in a statement. “It’s our job to be as aggressive as we can in recovering as much taxpayer money as possible, and today’s settlement is another huge step toward that goal. This settlement and the two previous total over $42 million, and we are committed to keep going. Rhode Islanders understandably feel hurt by this deal – and I do too – but I want everyone to know that we are demanding accountability, getting money back, and moving the state forward.”
Wells Fargo Corporate Communications Manager Kevin Friedlander issued a statement Tuesday saying “We are pleased to have reached an agreement in this case. We are not admitting liability, nor did we do anything improper. It is simply in our shareholders’ best interest to minimize the risk that accompanies lengthy litigation.
If the Court approves the settlement, the Corporation will have obtained settlements totaling more than $42 million in the ongoing 38 Studios litigation, nearly half of the roughly $88 million state moral obligation on 38 Studios bonds for both past and future appropriations.
The settlement is a product of a court-ordered mediation conducted by retired Superior Court Justice Francis J. Darigan, Jr. and the efforts of the state’s counsel in the 38 Studios Litigation, Max Wistow, Stephen Sheehan, and Benjamin Ledsham.
The Corporation previously settled claims against Antonio Afonso, Jr. and Moses Afonso Ryan Ltd. for $4.37 million in June 2014 and Adler, Pollock & Sheehan P.C., Robert I. Stoltzman, J. Michael Saul, and Keith W. Stokes for $12.5 million in August 2015.
The Corporation is still engaged in litigation against other defendants who are not included in this or prior settlements, including First Southwest Company, Starr Indemnity and Liability Company, Curt Schilling, Thomas Zaccagnino, Richard Wester, and Jennifer MacLean.
