Judge approves state settlement in 38 Studios lawsuit

R.I. Superior Court Judge Michael A. Silverstein has approved the state’s $4.37 million settlement with the law firm Moses Afonso Ryan Ltd., denying objections by a number of other defendants in the 38 Studios lawsuit who challenged the constitutionality of the proposed settlement. More

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38 Studios

Judge approves state settlement in 38 Studios lawsuit

COURTESY WIKIMEDIA COMMONS
WRITING THAT "PUBLIC interest in the 38 Studios Settlement Act outweighs unfairness to nonsettling defendants," R.I. Superior court Judge Michael A. Silverstein on Tuesday ruled that the state's settlement with two defendants in the 38 Studios lawsuit is constitutional.
Posted 7/22/14

PROVIDENCE – R.I. Superior Court Judge Michael A. Silverstein has approved the state’s $4.37 million settlement with the law firm Moses Afonso Ryan Ltd., denying objections by a number of other defendants in the 38 Studios lawsuit who challenged the constitutionality of the proposed settlement.

Wells Fargo Securities LLC, First Southwest Co., former R.I. Economic Development Corporation Deputy Director J. Michael Saul and other defendants had argued, among other claims, that the terms of the 38 Studios Settlement Act retroactively violated the rights of the nonsettling defendants.

In his ruling, however, Silverstein wrote that “public interest in the 38 Studios Settlement Act outweighs unfairness to nonsettling defendants.”

Under the settlement, Moses Afonso Ryan Ltd. and one of the firm’s partners, Antonio Afonso Jr., will pay $4.37 million, which will be covered by their insurance company. Both Afonso and the firm deny any wrongdoing or liability in connection with the 38 Studios deal.

Moses Afonso Ryan, the firm that served as bond counsel to the state on the 38 Studios LLC bond deal that ultimately left Rhode Island taxpayers on the hook for roughly $90 million, is among 14 defendants in the lawsuit, “Rhode Island Economic Development Corporation v. Wells Fargo Securities LLC et al.,” including 38 Studios founder Curt Schilling, former EDC Executive Director Keith W. Stokes, and lawyers and financial firms involved in the deal.

Following the announcement of the proposed settlement last month, Gov. Lincoln D. Chafee pointed to the settlement as vindication of his belief that the 38 Studios lawsuit would pay off for the state in the long term.

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