Rhode Island sues Curt Schilling over 38 Studios

State's legal team files suit against Schilling, other architects of controversial $75 million loan to bring Amalur studio to state.

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38 Studios may be off the hook for federal charges, but the state of Rhode Island is only just beginning its legal action against the company. The Rhode Island Economic Development Corporation (RIEDC) has filed a suit in Rhode Island superior court against some of the architects behind the controversial 2010 $75 million loan that brought 38 Studios to the Ocean State.

Schilling surrounded by media in Rhode Island in May. Image credit: Steven Senne, AP.
Schilling surrounded by media in Rhode Island in May. Image credit: Steven Senne, AP.

Defendants include 38 Studios founder and former Major League Baseball pitcher Curt Schilling and former company CEO Jennifer Maclean, as well as banks Wells Fargo and Barclays Capital, among numerous others. The entire 97-page complaint was posted to the RIEDC website.

Accompanying the suit was a video message (embedded below) from Rhode Island governor Lincoln Chafee. In the two-and-a-half-minute address, Chafee reiterated that the original $75 million loan did not sit well with him, and that his primary goal is to protect taxpayer money.

To this end, Chafee brought on attorney Max Wistow to examine 38 Studios with respect to the state's position. In an executive session of the RIEDC, Wistow briefed the board and it was unanimously decided that legal action would be authorized.

"This vote was not taken lightly, and it was taken with the clear goal of protecting the taxpayers of Rhode Island," Chafee said.

Chaffee refused to go into specifics regarding the complaint against 38 Studios, saying that doing so "could jeopardize this process and endanger our ability to recoup taxpayer losses."

"Litigation is often long and tedious," he said. "The filing of this complaint is only the beginning. I know therefore there still will be many unanswered questions as the legal process continues and if and when other information comes to light it will be appropriately addressed."

The suit itself contains numerous claims, and opens by alleging that the defendants did not speak with the RIEDC board when doubts about 38 Studios' sustained financial viability became known.

"Defendants knew or should have known, but failed to inform the EDC Board, that 38 Studios was destined to fail according to 38 Studios’ own financial projections," reads a line from the complaint.

In total, the complaint includes 17 counts of alleged wrongdoing. These include counts of fraud, unjust enrichment, civil conspiracy, breach of implied covenant of good faith and fair dealing, negligence, legal malpractice, negligent misrepresentation, fraudulent misrepresentations and omissions, and breach of fiduciary duty.

The RIEDC has requested a trial by jury for all issues.

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