ECONOMIC DEVELOPMENT

EDC hires firm to investigate parties in 38 Studios deal

PBN FILE PHOTO/RUPERT WHITELEY
THE EDC HAS hired Providence law firm Wistow & Barylick to pursue legal action against “third parties” connected with the 38 Studios LLC loan guarantee, Gov. Lincoln D. Chafee announced Tuesday.
Posted 6/26/12

PROVIDENCE – The R.I. Economic Development Corporation has hired Providence law firm Wistow & Barylick to pursue legal action against “third parties” connected with the 38 Studios LLC loan guarantee, Gov. Lincoln D. Chafee announced Tuesday.

Wistow & Barylick will operate as special counsel to the EDC.

The firm will be independent from Shechtman Halperin Savage LLP, the quasi-state agency’s house legal council, which is representing the state in 38 Studios bankruptcy proceedings.

At a Tuesday afternoon news conference hosted by Chafee, Max Wistow said his firm would work with the state-commissioned 38 Studios forensic audit team to search for liable third parties and try to recoup some lost taxpayer money. He declined to discuss possible targets for lawsuits.

“We are going to try to find out what happened and who knew what and when,” said Wistow, who drew similarities between the 38 Studios case and Station nightclub fire legal proceedings, which he was involved in.

Asked whether the former members of the EDC Board of Directors who voted for the 38 Studios loan guarantee would be targets of legal action, Wistow said only that he couldn’t exclude them and would definitely be “talking to them.”

Other potential third party targets that were not discounted included firms that assisted the EDC in the loan guaranty process.

Wistow & Barylick have been retained on a contingency basis that will pay the firm 16.66 percent of funds recovered.

Also at the news conference, Chafee called 38 Studios founder Curt Schilling’s claim that the state had scuttled an imminent private investment in the company “inaccurate.”

He said the state had been open to any way to help save the company but no deal Schilling brought forward appeared credible.

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