The state Commerce Corporation has agreed to a $12.5 million dollar settlement with four defendants over the collapse of video-game maker 38 Studios, including Keith Stokes, the former head of the state's economic development agency.
The other defendants are Adler Pollock & Sheehan and lawyer Robert Stolzman, which previously represented the state Economic Development Corporation, as the Commerce Corporation was previously known, and J. Michael Saul, a top official in the EDC. The settlement is subject to approval in Superior Court.
"In December 2014, the Commerce Corporation, after considering the extent of the defendants’ insurance coverage, made a demand of these four defendants that they settle for $12.5 million," according to a statement released by Commerce spokeswoman Melissa Czerwein. "This settlement reflects these defendants’ agreement to that demand. The Commerce Corporation and the settling defendants are mindful of the inherent uncertainty of litigation and the financial costs associated with it, and they have agreed that this settlement is reasonable under the circumstances."
In a statement, Adler Pollock & Sheehan said, "The 38 Studios settlement approved today by the Commerce Corporation Board ends several years of extremely costly, time-consuming and distracting litigation. Adler Pollock & Sheehan and the Plaintiff will never agree on issues of responsibility, liability and damages; but they do agree that it is in the best interests of all concerned to put this matter behind them so that this dispute will finally end."
The state last year clawed back $4.37 million in an earlier settlement with two other parties, Antonio Afonso, Jr. and Moses Afonso Ryan Ltd.
Lawsuits over the collapse of 38 Studios in 2012 are continuing against 9 defendants, including company owner and former Red Sox star Curt Schilling. The Commerce Corporation identifies the other remaining defendants as Wells Fargo Securities, LLC, Barclays Capital Inc., First Southwest Company, Starr Indemnity and Liability Company, Thomas Zaccagnino, Richard Wester, and Jennifer MacLean.
38 Studios was attracted to Rhode Island with a $75 million state-backed loan guaranty approved in 2010. The company collapsed two years later, leaving state taxpayers on the hook for more than $110 million.